Whistle-Blower Wins Case Against State But Unemployment Fraud Claims Remain Unclear

Jun 23, 2014

Diane Parcell, a former 30-year employee at the Department of Economic Opportunity, stands with her attorneys Keisha Rice (left) and Patrick Frank (right) at her home in Monticello. Parcell won a $50,000 whistleblower lawsuit claim against DEO.
Credit LHatter / WFSUNews

A former employee of the Florida agency that handles unemployment benefits has won a whistle-blower lawsuit against the state.

Diane Parcell was working at the Florida Department of Economic Opportunity in 2012 when she came across an enigma: A woman who had declared bankruptcy had been sent to a collection agency for unemployment compensation overpayments—even though her bankruptcy made her ineligible for collection.

Parcell says she found 97 other instances where people who were either dead, bankrupt or otherwise not legally liable for reimbursing the state were also referred to collection agencies.  Her attorney, Keisha Rice, says Parcell later contacted the Department of Financial Services and spoke with Tanner Collins, an administrator.

“In the discussion Diane had with Mr. Collins at DFS, that’s where they were comparing criteria," Rice says. "When she said, 'I have 97 with this criteria', he said, 'that’s interesting that you have cases with that criteria because we just found 19,000 [people] with that same criteria.”

But that 19,000 figure is in dispute. The Florida Department of Financial Services is still researching the claim, and Collins was not in the office the day of the press conference. Parcell herself also draws a distinction on those 19,000 people.

“Even though some of those may have been suitable for referral to a collection agency, what we have here is an employee who is not doing things correctly," she says. "And we know at least 97 times, there could potentially be legal ramifications for what is done. Maybe not from the 19,000. But, I only found 97. If I’d been allowed to continue my investigation, I don’t know how many I would have found.”

She says it's possible some of the 19,000 people flagged were simply sent to the wrong collection agency, and reporting people who legally owe money to the state to the wrong place is not illegal. But Parcell’s attorney, Keisha Rice, insists the majority of the 19,000 other people were sent to a debt collector improperly -- though she admits, no one is quite sure what has happened since then.

“We were never able to get someone who would say, ‘We know who those people are, and we’re going to take care of this.’ There were many different answers being given under oath at trial," she says.

A man answering the phones at Frank and Rice, PA—Rice’s firm, says the transcripts from the court case aren’t available.

In August of 2012, a day after filing a claim for whistle-blower protection, Parcell was placed on administrative leave and later fired. Now almost two years later, a court has agreed Parcell was a whistle-blower and awarded her $50,000 in damages.

While she’s satisfied with the outcome of her case, Parcell says the past two years haven’t been easy, and she worries others might see her case and be afraid to point out similar mistakes in the future.

“Instead of me being a cautionary tale to other people not to do the right thing, maybe someone will do the right thing and put the proper people in charge at the agency where, when someone comes forward with a legitimate concern and complaint, that the right thing is done," she says. 

Parcell’s attorneys  say they’re concerned Florida taxpayers could be on the hook for nearly $2 billion, an estimate based on the initial $100,000 overpayment collection claim that started the investigations. But for their math to work, all 19,000 people would have to be eligible for a $100,000 settlement from the state.

In a statement, the Florida Department of Economic Opportunity calls Parcell’s allegations “meritless.”

Parcell's other lawyer, Patrick Frank, and the PR firm hired to represent them say DEO’s failings are a cover-up orchestrated by the Scott administration. 

“It’s my belief based on everything I’ve heard and seen  that this whole thing was done to artificially gin up the numbers so the administration could stand in front of a podium and say they were cracking down on unemployment abuse," Frank says. He hasn't provided evidence to back up that claim however.

The governor’s reelection campaign calls the allegations a stunt, staged by a firm that also works for Democratic gubernatorial candidate Charlie Crist. The firm and the attorneys say the two issues are unrelated.

DEO is an agency under the direction of Scott. The Florida Department of Financial Services is headed by state Chief Financial Officer Jeff Atwater.