The Prosecutor's Office has launched a fraud investigation into an individual suspected of attempting to defraud the Unemployment Insurance Fund via wage compensation.
The investigation was launched based on § 209 of the Penal Code, a spokesperson for the Southern District Prosecutor's Office told ERR. This section addresses the causing of proprietary damage to another person by knowingly causing a misconception of existing facts for the purpose of significant proprietary benefit and is punishable by a pecuniary punishment or up to three years' imprisonment.
Unemployment Insurance Fund communications director Annika Koppel told ERR that the fund contacted the Prosecutor's Office once concerns arose regarding suspected fraud.
"When processing wage compensation applications in May, we noticed a group that sought wage compensation for their employees via various companies," Koppel said. "If this scheme had been successful, it would have caused damages of €100,000."
According to the communications director, some wage compensation applicants have withdrawn their applications after the Unemployment Insurance Fund presented them with additional questions. She explained that some companies may just not have familiarized themselves sufficiently with the conditions before applying, but in some cases there were attempts to dishonestly receive money.
"There are attempts to test and take advantage of every system in the world, which has also been the case with this wage compensation," Koppel said. "Generally speaking, we can say that the majority of businesses have nonetheless sought wage compensation honestly and based on actual need."
Koppel noted that some business-owners have sought wage compensation for employees who were out for an entire calendar month either on vacation, sick leave or parental leave.
"In order to receive wage compensation, the number of employees or wages have been cut," she continued. "This has been justified with either an increase in the company's turnover or the fact that some employees have been laid off and the workload for those remaining has increased."
The Unemployment Insurance Fund has also noted cases where a board member's employment contract has been changed in order to receive wage compensation as well as cases where business-owners have not paid employees the conditional €150 in own contribution.
"If an employer has attempted to unfoundedly take advantage of wage compensation or erred against set conditions, such as laid off an individual who has received wage compensation earlier than permitted, then we will demand repayment of the compensation from the employer," Koppel said.
Thus far, the total cost of the compensation measure together with Unemployment Insurance Fund-paid social tax and employers' unemployment insurance tax has been nearly €240 million. Compensation between March and May has averaged €702 in size.
A total of nearly 137,000 from 17,500 companies have received wage compensation from the Unemployment Insurance Fund.
Editor: Aili Vahtla