F.J. Capozzi, Sr. v. UCBR, 2283-2285 C.D. 2015

Background

Claimant Frank J. Capozzi, Sr. received regular UC ($5,538), EUC ($10,293) and state extended benefits ($2,847) for claim weeks from July 31, 2010 through March 17, 2012 while repeatedly certifying $0 earned and denying self-employment.
After a separate criminal/insurance investigation, the Department’s Audit/Integrity office found Claimant incorporated and operated "Hindi Beginnings, Inc.," signed corporate documents and checks, controlled business bank accounts, performed paid auto repairs and snow‑removal, and received reported and unreported earnings (including a 1099 for $8,999 in 2011).
The Service Center issued determinations finding Claimant ineligible for UC, EUC and state extended benefits, and assessed fault overpayments for UC/state extended and fraud overpayments for EUC, totaling $18,678.
At the Referee hearing the Department presented investigative testimony and documents; Claimant did not testify in his defense. The Referee found Claimant self‑employed, ineligible for benefits, and accountable for fault/fraud overpayments.
The Board initially modified the Referee’s orders to classify overpayments as non‑fault/non‑fraud, but after the Department’s reconsideration request the Board vacated, re‑heard briefing, and ultimately affirmed the Referee: Claimant was self‑employed, ineligible, and liable for fault and fraud overpayments.
Claimant appealed pro se; the Commonwealth Court affirmed, rejecting challenges to the Board’s reconsideration, the self‑employment finding, and imposition of fault/fraud overpayments.

Issues

Issue	Claimant's Argument	Department's Argument	Held
Whether Board abused discretion in granting reconsideration	Board lacked good cause; Department only rehashed credibility about Claimant not testifying	Reconsideration proper to address legal classification of overpayments and show intent; lack of claimant testimony permits negative inference	Board had good cause to reconsider and did not abuse discretion
Whether Claimant was ineligible for UC/EUC/extended benefits as self‑employed	Evidence insufficient to show ownership, control, or purchase of equipment for Hindi	Claimant incorporated Hindi, served as officer, opened/used bank accounts, signed checks, earned income — meeting both prongs of self‑employment test	Substantial evidence supports finding Claimant was self‑employed and ineligible
Whether fault/fraud overpayments were improper because Claimant sought to correct earnings	Attempted correction undermines intent to mislead; no willful nondisclosure	Repeated false certifications, failure to report earnings despite warnings, admissions (amnesty hotline, 1099) show knowing nondisclosure	Board reasonably found Claimant knowingly withheld material facts; fault and fraud overpayments upheld
Whether Claimant’s late appeal/due process defect required dismissal	Board failed to mail orders to prior counsel causing late filing while Claimant incarcerated	Board acknowledged mailing error but did not seek dismissal; administrative remedies available	Court allowed relief (nunc pro tunc) for administrative breakdown; no dismissal required

Key Cases Cited

Commonwealth v. $23,300.00 U.S. Currency, 733 A.2d 693 (Pa. Cmwlth. 1999) (negative inference from failure to testify)
Laster v. Unemployment Compensation Board of Review, 80 A.3d 831 (Pa. Cmwlth. 2013) (good‑cause standard for Board reconsideration)
Ensle v. Unemployment Compensation Board of Review, 740 A.2d 775 (Pa. Cmwlth. 1999) (reconsideration requires new evidence, changed circumstances, or oversight of law)
Silver v. Unemployment Compensation Board of Review, 34 A.3d 893 (Pa. Cmwlth. 2011) (both prongs of employment test required to find "self‑employment")
Maiorana v. Unemployment Compensation Board of Review, 453 A.2d 747 (Pa. Cmwlth. 1982) (fault requires findings about claimant's state of mind)
Greenawalt v. Unemployment Compensation Board of Review, 543 A.2d 209 (Pa. Cmwlth. 1988) (intentional conduct to mislead supports fault overpayment)
Matvey v. Unemployment Compensation Board of Review, 531 A.2d 840 (Pa. Cmwlth. 1987) (intentional misstatement on application justifies fault overpayment)
Amspacher v. Unemployment Compensation Board of Review, 479 A.2d 688 (Pa. Cmwlth. 1984) (failure to provide truthful information supports overpayment findings)
McKean v. Unemployment Compensation Board of Review, 94 A.3d 1110 (Pa. Cmwlth. 2014) (Department bears burden when it initiates self‑employment suspension)
Cook v. Unemployment Compensation Board of Review, 671 A.2d 1130 (Pa. 1996) (nunc pro tunc relief when administrative process breakdown causes untimely appeal)