Fear of filing: State seized millions in tax returns for alleged unemployment fraud

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KENTWOOD, Mich. -- Nykesha Witherspoon said she filed for and collected unemployment in 2011. However, the Unemployment Insurance Agency wanted the money back and sent the Kentwood woman a letter in 2013.

It said she was overpaid. Not only that, the mother of two was accused of committing fraud. So a penalty quadrupled her alleged restitution. She's being told she owed $35,000 in fines and penalties.

She had hearings. Court records show the UIA didn't show up to the first hearing. The judge ruled in her favor and said the agency failed to give a reason for the so-called fraud. However, the agency fought to overturn the ruling and claimed she misreported her income.

"They also took my income tax refund from last year," Witherspoon said.

Her refund was worth just under $4,500. Fearing it would also be taken this year, she hasn't filed her taxes yet.

Agency records FOX 17 obtained through the Freedom of Information Act show the state is raking in a lot of money. The UIA took more than $30 million in state and federal tax returns last year. That's hard-earned money from people accused of fraud who may have been innocent.

FOX 17 learned in the fall that case reviews by the UIA proved thousands of people were innocent. It's not clear how much the agency had to give back.

"There's no way I can pay all that back, cause I know I didn't commit any fraud. So, that's what I've been fighting for; to prove that I didn't commit any fraud," Witherspoon said.

She adds that she's been working for the same employer, a hotel, for the past seven years. She's now part-time.

The Problem Solvers have reached out to the agency on her behalf to try and get some answers.

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18 comments

  • UIA_THIEVES

    They took my STATE and FEDERAL tax refunds. UIA stated I only owed $1,165 – they took ALL of my taxes which is MORE than $1,165. My “over payment” was less that $400, – they gave me $1,200 in fines for “fraud” . Seems to me they owe ME $400 at least…or give me my stolen money back. !

  • Nicole Harris

    Darren,

    I have watched all of these reports from the beginning on the scandalous Michigan UIA’s process of fleecing us hard working citizens and striking us where it hurts when we are down and at our most vulnerable! My situation is VERY similar to Ms. Witherspoon’s that you interviewed awhile back. I have filed a half dozen appeals on my convoluted and bogus “Fraud Case” as deemed such by the worthless “Midas-Touch-Judge-Jury-& Executioner” Style Prosecution Program! I received the same letter (almost verbatim) as Ms. Witherspoon from the only legitimate hearing and ruling that my case received (THAT I WASN’T INFORMED ABOUT AHEAD OF TIME & HENCE DID NOT SHOW UP FOR?!) But my letter also said that NEITHER parties showed up and so NO Judgement was being entered!

    Now I am getting WEEKLY “statements” from the UIA claiming how much money I owe them including all the interest they are piling on every month! And I dreaded filing my taxes this year, as well, because they have also threatened to STEAL all of my tax returns too, which will be around $9000.000!!!! Did I mention that the over payment was for less than $9000.00, and they want to FLEECE ME FOR A GRAND TOTAL OF OVER $39,000.00 in repayment!!!!!!

    They will be stealing my tax returns for the next FIVE YEARS and beyond if we cannot stop them!!! I am a single mom of 4 and I can barely afford to feed and clothe and keep a roof over my children’s head as it is! I work TWO jobs, 1 as as a preschool teacher, and 1 as a Community Resources Coordinator. I need all of my tax return money each year, so that I can make all our financial ends finally catch up and meet for a little while at least! Is there anything I can do to stop this travesty? It has been suggested to file Bankruptcy and put that debt into the Bankruptcy?! Is that even possible? I cannot even access the State’s miWAM Online Services Website any longer to file any more Appeals Forms, or even check the status of my account?!

    I saw that “Legislature” was being filed and working its way through all the necessary “Bureaucratic Red Tape” that usually chokes out and kills most Bills before they have a chance to become a Law. Is there anything else I can do NOW to save my Tax Return and my family’s future financial stability for the next 5+ years?! Please write me back on here or email me asap with any advice/suggestions you may have!

    Thank You so much for exposing one of the many injustices of our governmental processes! Now, WHAT ELSE CAN WE DO TO TAKE ACTION AND “STRIKE BACK” AT THEM WHEN THEY ARE DOWN, AND MOST VULNERABLE?!?! Anything? Or do we still have to just “bend over…and take our…….wrongful & unjust spanking?!?!?” (Feel free to fill in your own sentiment at the end there!!!)

    • Randy Quaid

      You took the money that you knew was not yours. Now you pay the price, why should tax payers continue to support you?

  • Leanette

    Why is the state ripping innocent people off, a joking matter? Sickos take a break please. I know firsthand what this woman has gone through. The entire system is a complete backwards ditch. And they refuse to fix it. And why the hell should they, when they can simply take their $ back illegally. Wake up idiots. Fraud is real. Ripping innocent claimants off their earned benefits is foul nasty. Kudos to those who’ve successfully won in court.