Michigan will pay people wrongly accused of fraud

DETROIT (HPD) — Michigan lawmakers have agreed to spend $20 million to settle a lawsuit brought by thousands of people who were wrongly accused of fraud when applying for unemployment benefits.

The fund was included in a larger bill recently signed into law by Democratic Gov. Gretchen Whitmer. Previously, an agreement was reached between the state attorney general’s office and the lawyers of the people who denounced the violation of their constitutional rights.

The case gained momentum in July after the Michigan Supreme Court ruled that the plaintiffs could seek financial help from the state.

Behind the problem was an automated computer system that was used during the administration of Republican Governor Rick Snyder. The people were accused of cheating to get government unemployment aid. They were forced to repay the money, along with substantial penalties, before the Unemployment Insurance Agency finally acknowledged there were widespread errors affecting more than 40,000 people.

Some victims had to hire lawyers. Others filed for bankruptcy, lost wages, suffered from poor credit ratings, or had trouble finding jobs and housing.

Plaintiffs’ attorneys argued that their clients’ rights to due process and to be heard were violated when they attempted to resolve the mess.

An attorney for the plaintiffs, Michael Pitt, said thousands of people should be compensated, but the exact number is still unknown.

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