More than 80,000 New Yorkers who fraudulently collected a total of $141 million in unemployment benefits will have to repay the state via their federal tax returns, a state official said.

The new program begins next year and is open to all U.S. states which previously could only garnish state tax returns—not federal tax returns, New York Labor Commissioner Colleen Gardner told reporters on a telephone conference call.

The previous system proved ineffective because a number of individuals either did not file state tax returns or their refunds were too small to fully repay the state, she said.

The program only applies to individuals who have owed the state money for six months to 10 years, and they all have been sent repeated notices they have failed to answer.

Individuals are given 60 days to prove they are not the residents who wrongly collected the unemployment benefits, have already repaid the state, or expunged the debt in bankruptcy court, the Labor Department said in a statement.

Other steps the state is taking include speeding how often it compares lists of new hires with unemployment beneficiaries to each month instead of each quarter.

About one-third of the 80,000 individuals kept collecting unemployment benefits though they had found new jobs, she said. Fraudsters must repay the state before they can get any more checks if they are laid off. And some individuals will face criminal charges, she said.

New York City, whose population of 8.4 million is almost half that of the entire state, had the most fraudsters: 29,798 individuals owe $54,083,295, the Labor Department said.

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(Source: Reuters)