Special Report: Bilking the Benefits
Updated: Friday, February 1 2013, 02:10 PM EST
A News 13 investigation uncovers serious flaws in North Carolina's unemployment program.
In recent years the state has rejected benefits claims from hard-working, law-abiding citizens while approving claims for those who don't qualify, including some claims filed from prisons.
We found a scam with so many red flags that you'd think the employment security commission would catch on early.
It did not.
Criminals were allowed to bilk hundreds of thousands of dollars in unemployment benefits from you, the taxpayer.
William Parton is like millions of Americans who rely on unemployment benefits to pay their bills.
He was stunned when we told him criminals behind bars are bilking the system, receiving unemployment benefits, while other, law-abiding citizens are denied.
But it's not just criminals inside the jail manipulating the system.
Criminals on the outside are doing it too, through a scheme few might even think possible.
Reggie Wimbush and Jeffrey Glenn are convicted criminals who authorities say created 15 fake businesses, including five at one address. Wimbush's family's home in Shelby.
Investigators say Wimbush stole his relatives' social security numbers out of the mailbox and made up others. He then used them to file for jobless benefits.
23 fictitious employees, a claim for each, over just three months.
Wimbush used a legitimate downtown Asheville address for one of his fake businesses.
"Top Metal Fabrications" is really a dance studio and not connected to any wrong doing.
Using this address, and 14 others, Wimbush and his co conspirators were able to collect more than $300,000 in benefits, until Uncle Sam came knocking at tax time and nobody answered or paid up.
According to detectives, Wimbush admitted he waited for the postman every morning to intercept the jobless benefits debit cards loaded with funds
Larry parker, NC Employment Security Commission, "what we have to do have to be able to do is figure out why or how does that happen how can we stop and extreme case from happening and we are doing just that."
The Employment Security Commission tells News 13 it's working on ways to better catch such extreme cases, one method is to check whether a business is paying its quarterly taxes on time which could raise a red flag.
Employers are now required to report new employees and are cross matched by also sending a letter to the employee. They've got seven days to respond. The ESC says it's saving hundreds of thousands of dollars.
The ESC admits, just as we've shown you, there are flaws in the system but says they continue to try and improve.
Reggie Wilson was sentenced to five years in prison.
Jeffrey Glenn is awaiting trial.
Meanwhile, the ESC is tightening rules on employers and claimants to prevent fraud and adding technology to catch potential scams early on.
Follow Russ Bowen on Twitter @RussBowenNews13