A state judge said Monday he plans to sign off on a $20 million settlement to compensate about 8,200 individuals who were the victims of Michigan's automated state software system that mistakenly accused thousands of unemployment fraud and collected money from them between 2013 and 2015.
The settlement given preliminary approval Monday by Court of Claims Judge Douglas Shapiro would set aside roughly $12 million for the estimated 8,168 individuals affected by the automated software issue on or after March 9, 2015. Another $500,000 would be targeted for administration and $6.4 million would be paid to attorneys.
"We believe there is more than sufficient amounts of money to compensate most people for 100% or close to 100% of economic losses," said Michael Pitt, a Royal Oak-based attorney for the class that filed the suit.
The Michigan Legislature in September set aside about $20 million to pay for the settlement, and the proposed agreement was announced in October. Lawyers are hoping to gain final approvals of the plan and start distributing settlement money by September 2023.
The false fraud accusations arose when the Michigan Unemployment Insurance Agency in 2013 began using an auto-adjudication system under Republican then-Gov. Rick Snyder that leveled false accusations of fraud against claimants, resulting in the seizure of assets such as tax refunds and paychecks. Claimants filed a lawsuit in 2015, alleging their due process rights had been violated by the government's...
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