Virginia business owner facing tax increase over unemployment fraud: 'Nobody was laid off'

No Help From the VEC: Small businesses victimized by unemployment fraud left to fend for themselves
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Posted at 7:37 PM, Mar 04, 2022
and last updated 2022-03-06 15:05:01-05

PETERSBURG, Va. -- For more than a year now, we've been reporting on the many issues plaguing the Virginia Employment Commission, which the pandemic has made so much worse: people who struggled to get benefits, to get their appeals heard or to report fraud.

Throughout, there has always been one constant: the excruciating difficulty in actually reaching someone at the VEC who can help.

A local business owner is familiar with that torment: because of multiple fraudulent claims he's now facing higher premiums from the VEC, and he says no one is listening.

“We've been here for about 35 years; my family's been in here for 58,” said Jim Whelan, who owns Whelan’s Service Center in Petersburg.

Whelan has built up his family business over the years, and it now boasts 12 employees.

Business is good, but he recently ran into an unexpected tax problem.

"We got a notification on our quarterly report that we had three people file claims against us in the last quarter, and we've actually had none,” Whelan said. “And surprisingly, I'm one of the people that supposedly filed unemployment- on myself. They actually have our social security numbers. They’re saying that we all received money.”

Virginia Employment Commission
Virginia Employment Commission

Because the VEC says his auto shop laid off those three employees, there are now looming tax implications for the coming year.

“It affects what we pay every year at the beginning of the year, because it updates per employee how much money we have to pay into the VEC,” said Whelan. “So I'm being rated higher, as far as sending in money, but of course it was never paid out legitimately.”

Whelan says his multiple attempts to get through to someone at the VEC have been frustrating and futile.

“We've gone through all the steps to go through an email, fill out their questionnaires, call and leave messages, of course I've not heard anything back yet,” he said.

He says the system is broken.

“When you call their number, It goes to a voicemail telling you that their mailbox is full at this time,” said Whelan. “And that's where it ends. It just seems strange that I can call and get somebody if they need a payment. But I can't get saw somebody if I have a problem.”

Whelan says for a shop that's been busy all through the pandemic, finding time to navigate the VEC's unresponsive bureaucracy has been an exhausting nightmare.

“At this point, we probably have over 20 hours of emailing and formatting letters to send people, for requests and help, even reaching out to y'all and everybody else that we can for an ear,” Whelan said.

Whelan also points out that only one of three supposed claimants got a 1099-G tax document which reports income and goes straight to the IRS as well. He says unreported income could trigger an audit.

“Everybody that I had working for me, nobody was laid off,” he said. “Nobody was fired, nothing during this period. And where do we go from here? I don't have any other way to go get anybody to help me. So we've written everybody we can from the governor on down.”

Whelan says two other Tri-Cities business owners have told him the same thing: each received notifications this year from the VEC that three employees supposedly filed claims last year.

Claims that the VEC never verified with them.

They all three worry that their tax problems are just the tip of the iceberg.

“It concerns me that somebody has my corporate federal ID number. They have my VEC number. They also have my personal social security number and my employees,’” Whelan said. “So it's identity theft on top of everything else.”

Desperate, Whelan has a message for new VEC Commissioner Carrie Roth.

“Where does the identity theft start?” asked Whelan. “There's got to be some other plan then the empty depths of Hell that I've been in, trying to get somebody to return a call or notification that they even received my concern. I don't even know if they've read it yet. You know, there’s got to be a better path for the employer and employee to be able to get resolution with the VEC right now. I don't see there is one.”

I reached out multiple times this week to VEC spokeswoman Joyce Fogg about Whelan’s and other businesses troubles.

She did not to respond to any inquiry.

I also asked what may be the most critical question: how widespread is the fraud that is now impacting small businesses?

Again she did not respond.

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