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#2246427 - 12/10/20 09:46 PM Owner of a business and collecting unemployment
Megaman Offline
100 Club
Joined: Jul 2017
Posts: 116
Good Afternoon,

Would it be considered fraud if a customer owns a business (and is making money) but is collecting unemployment benefits? It just seems wrong. If it is considered fraud should Bank's be filing SARs on these customers?

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#2246430 - 12/10/20 10:10 PM Re: Owner of a business and collecting unemployment Megaman
BrianC Offline
Power Poster
Joined: Nov 2004
Posts: 6,322
FinCEN Advisory on Unemployment Fraud

Misrepresentation of income fraud: an individual returns to work and fails to report the income in order to continue receiving UI payments, or in an effort to receive higher UI payments, an applicant claims higher wages than he/she previously earned;
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!

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#2246437 - 12/10/20 11:53 PM Re: Owner of a business and collecting unemployment Megaman
ACBbank Offline
Power Poster
Joined: Jul 2006
Posts: 4,191
New York City
If it's fraud and it meets the filing threshold, you are required to file a SAR.
"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

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#2246456 - 12/11/20 07:59 PM Re: Owner of a business and collecting unemployment Megaman
RockChucker, CAMS Offline
Diamond Poster
Joined: Jul 2013
Posts: 1,657
The Country
Last I checked, FinCEN has asked that these be reported if related to the different programs created to assist during the COVID pandemic. I would report it even if less than threshold that requires you to file.
A successful man is one who can lay a firm foundation with the bricks others have thrown at him.
-David Brinkley

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#2246457 - 12/11/20 08:08 PM Re: Owner of a business and collecting unemployment Megaman
Skittles Offline
10K Club
Joined: Sep 2002
Posts: 13,963
One caveat to consider - do you know if the business owner is still receiving a salary? My brother has a business and received unemployment, but he and his partners stopped getting a salary during the pandemic.

If you know that he (or she) is receiving a salary, then I agree with filing.
My Opinions Only

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#2246503 - 12/14/20 06:38 PM Re: Owner of a business and collecting unemployment Megaman
Local_Banker Offline
Joined: Jun 2019
Posts: 53
There is guidance as to 1099 contractors who are collecting unemployment and still running their businesses. We have filed SARs on those.

For W2 employees, I believe you can collect unemployment while still being employed if your business has seen a downturn such that your wages have gone down. If you have a business owner you should be able to see if they are still paying themselves the same amount as they were before the pandemic. If they are collecting a smaller amount per week and also paying themself less then maybe not so suspicious. If the amounts (wages or unemployment) are unreasonably high then maybe a SAR is warranted. The business owner has paid unemployment insurance premiums in the past on their reported W2 wages and thus isn't necessarily excluded from collecting.

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