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EDD Fraud Experienced Tax Experts Pasadena

On: January 2, 2023

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EDD Fraud Experienced Tax Experts Pasadena

It is never good to commit fraud.  When you commit fraud against the government, you especially face a variety of adverse consequences, including possible incarceration.

Committing fraud against the Employment Development Department (“EDD”) is known as EDD fraud.  If you are charged with EDD fraud in Pasadena, you need the services of a knowledgeable EDD fraud experienced tax expert in Pasadena.

 

EDD

EDD administers the unemployment insurance, disability insurance, paid family leave, and employment tax programs for California.  It collects employment payroll taxes to help support these programs and pay their benefits.

 

EDD Prosecutes EDD Fraud

EDD is dedicated to deterring, preventing, and detecting fraud in the above-described programs.  It pursues cases involving the fraudulent receipt of benefit payments or the evasion of payroll tax reporting obligations and prosecutes those responsible for such activities to the fullest extent of the law.

Why You May Be Accused of EDD Fraud – General

Most EDD fraud is attributable to one of the following:

  • Making a false statement;
  • Providing wrong information;
  • Withholding facts; and
  • Committing identity theft.
 

EDD fraud can be divided into two categories based on who commits it – benefit claimants and employers.

Why Benefit Claimants May Be Accused of EDD Fraud

Among the examples of EDD fraud by benefit claimants in the area of unemployment insurance include the following:

  • Using false identification to claim benefits;
  • Providing false information about why you are unemployed;
  • Working while receiving benefits (known as “double-dipping”);
  • Claiming you are looking for a new job, but not actually doing so; and
  • Failing to disclose your receipt of workers’ compensation.
EDD fraud by benefit claimants also can occur in the disability insurance area, as follows:
  • Filing a claim with disability insurance for an injury or illness that does not exist; and
  • Helping another person file a false claim for disability insurance.
 

Why Employers May Be Accused of EDD Fraud

Employers can commit EDD fraud by failing to properly pay their payroll taxes.  Examples of such fraud include the following:

  • Filing false payroll tax returns;
  • Neglecting to report all wages paid and to pay payroll taxes;
  • Intentionally misclassifying employees as independent contractors without any support;
  • Paying employees in cash or “under the table” to avoid paying payroll taxes; and
  • Manipulating shell companies to obtain low unemployment insurance tax rates.
 

EDD Fraud is a Significant Problem

In January, 2021, California Labor Secretary Julie Su advised that $11.4 billion of unemployment insurance payments (roughly 10 percent of the total unemployment insurance payments) in California have been confirmed as fraudulent.

To address this problem, in July, 2021, McGregor W. Scott was hired as “fraud special counsel” to help investigate fraudulent unemployment benefits paid by California.

Penalties for EDD Fraud

If you have committed EDD fraud, you face a variety of serious penalties, including:

  • Financial liability for any false benefits collected, plus penalties and fines;
  • Financial liability for any unpaid payroll taxes, plus penalties and fines;
  • Loss of future income tax refunds;
  • Loss of eligibility to collect benefits in the future;
  • Prosecution by government authorities; and
  • Jail or prison sentences.
The possibility of facing incarceration for EDD fraud is not speculation.  Recent examples from 2021 show that such fraud can send you to jail.

On July 9, 2021, Richard Derderian was sentenced to three years in prison for filing $21,630 of fraudulent unemployment benefit claims.

Robert Maher, on June 22, 2021, was sentenced to six years and three months in prison and ordered to pay $609,335 in restitution to EDD for filing fraudulent claims for unemployment insurance benefits.

An employer, David Burgmeier (DBA Burgmeier Construction), on March 3, 2021, was sentenced to 24 months of formal probation, ordered to serve 180 days in the Ventura County Jail, and required to pay a fine of $2,400 to the California Victim Compensation Board, State Restitution Fund, a monthly formal probation fee of $107, restitution of $176,265 to the State Compensation Insurance Fund, and additional restitution to EDD, based on the employer not reporting employee wages to EDD and other tax agencies.

What to Do if You Are Accused of EDD Fraud – EDD Fraud Defenses

If you are charged with EDD fraud, all is not automatically lost.  The government still must prove its case, and you have the right to assert defenses against the alleged fraud.

First, you can argue that the issue was an accidental or innocent mistake by you, and not something that you did with fraudulent intent.

Second, you can argue that the issue is simply based on a reasonable disagreement between the government and you, and not something that you did with fraudulent intent.  For example, in certain cases, the proper classification of a worker as an employee or an independent contractor can be subject to a reasonable dispute.

What to Do if You Are Accused of EDD Fraud – “Plea Bargains”

If you have no effective defense to EDD fraud charges, your best result may be to enter into a “plea bargain” agreement.

Under such an agreement, in exchange for a guilty plea by you, the government may be willing to reduce its punishment of you.  The government can benefit from a “plea bargain” because it does not have to incur the cost and burden of proving its case at trial.

With a “plea bargain”, you may be able to avoid a prison sentence or at least reduce the amount of time that you will be incarcerated.

What to Do if You Are Accused of EDD Fraud – Hire EDD Fraud Experienced Tax Experts for EDD Fraud Cases

If you are charged with EDD fraud, you need to quickly realize that you need the services of an EDD fraud experienced tax expert.

Abe Lincoln is credited with the statement – “He who represents himself has a fool for a client”.  The complexity of, and the severe consequences from, EDD fraud cases definitely render EDD fraud defendants “fools” if they attempt to represent themselves.

Instead, they need to hire an EDD fraud experienced tax expert to handle their cases.  The key is not to hire any tax expert, but rather to hire a tax expert who specifically has prior knowledge and successful experience in handling EDD fraud cases.  To be represented by a tax expert who has never before worked on an EDD fraud case would be almost as “foolish” as trying to represent yourself in the matter.

Leading Tax Group – The Best EDD Fraud Experienced Tax Experts in Pasadena

If you need an EDD fraud experienced tax expert in Pasadena, you need representation by Leading Tax Group (their experienced team consists of a former IRS tax attorney, an experienced payroll tax and sales tax attorney, a retired IRS auditor (of 40+ years), and their own in-house accounting team!).

Leading Tax Group has the two qualities that are critical to successful representation in EDD fraud cases – broad knowledge of EDD fraud law and significant successful experience in helping their clients with their EDD fraud matters.  Leading Tax Group can help you both effectively present any defenses that you may have to EDD fraud charges and favorably negotiate the terms of any “plea bargain”.

Leading Tax Group has the knowledge and experience that make it the best EDD fraud experienced tax expert (their experienced team consists of a former IRS tax attorney, an experienced payroll tax and sales tax attorney, a retired IRS auditor (of 40+ years), and their own in-house accounting team!) in Pasadena.

Leading Tax Group has a conveniently accessible office in Pasadena at 225 S Lake Avenue, 3rd Floor.

If you are facing EDD fraud charges in Pasadena, you need the aggressive EDD fraud experienced tax experts (their experienced team consists of a former IRS tax attorney, an experienced payroll tax and sales tax attorney, a retired IRS auditor (of 40+ years), and their own in-house accounting team!) from Leading Tax Group.

For the best EDD fraud experienced tax experts (their experienced team consists of a former IRS tax attorney, an experienced payroll tax and sales tax attorney, a retired IRS auditor (of 40+ years), and their own in-house accounting team!) in Pasadena, contact Leading Tax Group now at (800) 900-4250 and schedule your free consultation today!

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