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John Baer: Cell earnings: Prison inmates collect unemployment

DID YOU KNOW that Philadelphia prison inmates collected unemployment benefits while sitting in their cells? They did: 1,162 of them got an average of $344 a week for, on average, 18 weeks. That's more than $7 million.

DID YOU KNOW that Philadelphia prison inmates collected unemployment benefits while sitting in their cells?

They did: 1,162 of them got an average of $344 a week for, on average, 18 weeks. That's more than $7 million.

And many of the 25,500 inmates in other county jails in Pennsylvania did the same.

We're talking cash for cons - tens of millions of tax dollars paid by employers and employees fraudulently scammed by incarcerated crooks.

Makes you want to get up every day, go to work and pay your taxes, right?

Well, hold on. Before you pick up torches and pitchforks, you should know that the state says such payments are ending under a program put in place by the Corbett administration, and unemployment-compensation payments to 3,000 inmates have stopped, saving up to $18 million a year.

But how'd this cons' con happen?

"Not sure," says Philadelphia Prison System information officer Shawn Dawes. "It just wasn't on anybody's radar."

Philly prisons commissioner Louis Giorla issued a statement to the Daily News praising state efforts, adding: "Offenders who are already in custody and supported by public funds should not be able to collect twice."

But they did. And getting the money back, even by attaching tax returns of scammers, is difficult, officials concede.

Such abuse isn't new, or unique to Pennsylvania.

A recent audit in South Carolina showed that inmates were getting unemployment benefits. Last year, Arizona found that 475 felons collected $1.1 million.

Still, the apparent scope of the problem here, its duration and the curiously quiet way it's being dealt with raises questions for which there seem to be few answers.

For example: How'd it happen?

Well, state corrections officials, since 1997, have linked with the Department of Labor and Industry to match incoming state prisoners' Social Security numbers with unemployment-compensation records to stop any benefits.

But it was only last month that Labor and Industry issued a news release - missed by most, apparently reported only by the online news service and not available on Labor and Industry's website - announcing a "new cross-match system to identify and stop benefit payments" to county prisoners.

This raises questions:

Why didn't state officials talk with county officials 16 years ago? Why didn't Labor and Industry, already working with state prisons, also work with counties?

Answers I got from Labor and Industry and the Department of Corrections were the same: "Don't know."

How was the system scammed?

Once one gets unemployment-compensation benefits, a required every-two-weeks renewal can be done over the phone, even by another person.

Because almost all payments are made through direct deposit (since 2000) or to Labor-and-Industry debit cards (since 2007), inmates could call or have someone call, and then collect.

The president of the Pennsylvania County Corrections Association, Berks County Prison chief deputy warden Janine Quigley, tells me that prevention is easy when checks come in the mail, because inmate mail is opened.

But L&I press secretary Sara Goulet says that maybe only 2 percent of benefit checks are mailed.

How long's the scam gone on?

Quigley has "no clue." Goulet says, "That's a good question." The closest estimate is in that aforementioned news release, which quotes L&I Secretary Julia Hearthway: "For many years."

How much has been lost?

Labor and Industry's January news release estimates that stopping benefits saves $12 million annually; Labor and Industry officials claim "potential" savings of $18 million a year.

But total tax dollars lost could be higher.

Here's why:

The Philly amount ($7 million) is based on statewide averages, according to the Labor and Industry manager of unemployment-compensation research, Kirk Basehore. The number of Philly inmates who collected (1,162) came from a pilot review done last May by the Corbett administration.

Those caught collecting represent 13 percent of Philly's 9,000 prisoners. If 13 percent of the 34,500 county prisoners statewide collected, the total take would be $27.7 million.

That's per year - for who knows how long.

Finally, the scant attention this story has gotten is suspicious.

You'd think a law-and-order governor with sagging poll numbers facing re-election next year would grab any opportunity to tout state savings.

And this is a two-fer: ferreting out fraud, saving resources.

But if it's been overblown or understated, more attention could be embarrassing: for the administration, if the former; for everybody but the cons, if the latter.