Audit of Detroit's employee benefits program finds fraud

Audit of Detroit's employee benefits program finds fraud

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DETROIT (WJBK) -

A new audit of the city of Detroit's employee benefits program found workers - some still on the job - collecting fraudulent unemployment benefits. Between July of 2011 and March of this year there were 1484 claims processed during the audit. Close to 200 of the claims were likely outright fraud. Another 500 or more were deemed highly questionable.

In some cases the fraud was as blatant as a worker who never missed a day of work claiming to be laid off and collecting benefits.

The probe was ordered by emergency manager Kevyn Orr as Detroit's bankruptcy moves through federal court. Orr says Detroit has debt and future liabilities of $18 billion dollars.

Findings show poor investment returns and bad real estate investments cost the funds more than $140 million dollars. The report also found a lack of oversight on the cities' part.

It has been reported that Kevyn Orr wants to freeze the cities pension system for public workers in light of the findings.

Any criminal wrongdoing found in the report will be turned over to state and federal prosecutors. We're told criminal charges are expected down the road.

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