IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Frank James Capozzi, Sr., :

Petitioner :

:

v. : Nos. 2283, 2284, 2285 C.D. 2015

: Submitted: December 9, 2016

Unemployment Compensation :

Board of Review, :

Respondent :

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge

HONORABLE ANNE E. COVEY, Judge

HONORABLE DAN PELLEGRINI, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY

SENIOR JUDGE PELLEGRINI FILED: January 19, 2017

In these consolidated petitions for review, Frank James Capozzi, Sr. 

(Claimant) petitions pro se for review of the Unemployment Compensation Board 

of Review’s (Board) orders

1

affirming the Unemployment Compensation Referee’s

(Referee) decisions finding that because he was self-employed and intentionally 

did not report earnings that: Claimant is ineligible for unemployment 

compensation (UC)2and emergency unemployment compensation (EUC)3benefits; 

 

1 By order dated March 1, 2015, this court granted Claimant’s motions to consolidate his 

petitions for review of the Board’s three underlying orders dated August 26, 2015.

2

Section 402(h) of the Unemployment Compensation Law (Law), Act of December 5, 

1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. § 802(h), provides that “[a]n 

(Footnote continued on next page...)
2

imposing fault overpayments of UC benefits4and state extended benefits;5and 

imposing fraud overpayments of emergency EUC benefits6totaling $18,678.00. 

We affirm.

 

(continued...)

employe shall be ineligible for compensation for any week . . . [i]n which he is engaged in selfemployment.”

3

Section 4001(b) of Title IV of the Supplemental Appropriations Act of 2008, Pub. Law 

110–252, 122 Stat. 2323, § 4001(b), 26 U.S.C. § 3304 Note (EUC Act), states in relevant part

that “[t]he State will make payments of [EUC benefits] to individuals who—(1) have exhausted 

all rights to regular compensation under the State law or under Federal law with respect to a 

benefit year . . . [or] (2) have no rights to regular compensation or extended compensation with 

respect to a week under such law or any other State unemployment compensation law or to 

compensation under any other Federal law. . . .”

4

Section 4005 of the EUC Act provides, in pertinent part:

(a) In General.—If an individual knowingly has made, or caused to 

be made by another, a false statement or representation of a 

material fact, or knowingly has failed, or caused another to fail, to 

disclose a material fact, and as a result of such a false statement or 

representation or of such nondisclosure such individual has 

received an amount of [EUC benefits] under this title to which 

such individual is not entitled, such individual—

(1) shall be ineligible for further [EUC benefits] under this 

title. . . .

(b) Repayment.—In the case of individuals who have received 

amounts of [EUC benefits] under this title to which they were not 

entitled, the State shall require such individuals to repay the 

amounts of such [EUC benefits] to the State agency, except that 

the State agency may waive such repayment if it determines that—

(1) the payment of such [EUC benefits] was without fault 

on the part of any such individual; and

(Footnote continued on next page...)
3

I.

Following his separation from employment with Oxford Management 

Services, Claimant applied for regular UC benefits receiving $5,538.00 in regular 

UC benefits for claim weeks ending July 31, 2010, through January 22, 2011. 

 

(continued...)

(2) such repayment would be contrary to equity and good 

conscience.

(c) Recovery by State Agency.—

(1) In General.—The State agency may recover the amount 

to be repaid, or any part thereof, by deductions from any [EUC 

benefits] payable to such individual under this title or from any 

unemployment compensation [(UC)] payable to such individual....

5

Section 804(a) of the Law, 43 P.S. § 874(a), states in relevant part that “[a]ny person 

who by reason of his fault has received any sum as compensation under this act to which he was 

not entitled shall be liable to repay ... a sum equal to the amount received by him. . . .”

6

Section 801(b) of the Law states, in relevant part:

(b) Whoever makes a false statement knowing it to be false, or 

knowingly fails to disclose a material fact to obtain or increase any 

compensation or other payment under this act or under an 

employment security law of any other state or of the Federal 

Government or of a foreign government, may be disqualified in 

addition to such week or weeks of improper payments for a penalty 

period of two weeks and for not more than one additional week for 

each such week of improper payment. . . . The penalty weeks 

herein provided for shall be imposed against any weeks with 

respect to which the claimant would otherwise be eligible for 

compensation, under the provisions of this act, which begin within 

the four year period following the end of the benefit year with 

respect to which the improper payment or payments occurred.

43 P.S. § 871(b).
4

When his regular UC benefits were exhausted, he then applied for EUC benefits,

receiving $10,293.00 in those benefits for claim weeks ending January 29, 2011,

through December 17, 2011. After exhausting his EUC benefits, Claimant applied 

for and received state extended benefits for the claim weeks ending December 24, 

2011, through March 17, 2012, totaling $2,847.00.

During all claim weeks that he received UC, EUC and state extended 

benefits, Claimant continuously, repeatedly and affirmatively indicated that he was 

not self-employed or otherwise working and reported $0.00 in earnings. Claimant 

also submitted 13 weekly state extended benefit forms indicating that he did not 

receive earnings of any kind.

On June 12, 2014, more than two years after Claimant last received 

benefit payments, the Department of Labor and Industry’s (Department’s) Office 

of Integrity, Audits Division (Audits Division) issued a Complete UC Fraud 

Investigation Report regarding the Department’s potential overpayment to 

Claimant. The investigation was prompted by an Attorney General’s Office

investigation of Claimant for insurance fraud, theft by deception and criminal 

conspiracy that revealed that Claimant may have been receiving benefits while 

working and/or self-employed under the name Hindi Beginnings, Inc. Bonnie 

Haas, the Audit and Investigation Specialist who issued the Fraud Investigation 

Report, found that:

[T]he information received indicating [Claimant] may 

have filed for and received UC benefits while working 

and/or [self-employed] appeared accurate. Based on my 

findings detailed in the body of this report, it appears 
5

immediately following [Claimant’s] separation on July 

22, 2010[,] from Oxford Management, [Claimant] 

created Hindi Beginnings Inc. [Claimant] told me via 

telephone that he essentially listed all areas he . . . had 

experience in, with hopes of making money. . . . Review 

of Hindi Beginnings and [Claimant’s] personal bank 

records revealed [Claimant] played a significant role in 

Hindi Beginnings. Based on same and follow-ups . . . it 

appears [Claimant] entered into [self-employment], 

removing himself from the labor market to pursue his 

business activity. Moreover, the records obtained 

verified [Claimant] made a substantial investment into 

his business both in time and money. Accordingly, there 

is a potential overpayment of $18,678 beginning 

[compensable week ending] July 31, 2010 due to selfemployment.

(Record (R.) Item No. 4, UC Fraud Investigation Reports, dated 6/12/2014.)

On June 20, 2014, the Scranton UC Service Center (Service Center) 

issued three separate notices of determination finding Claimant ineligible for UC, 

EUC and state extended benefits and assessing fault overpayments for his UC and 

state extended benefit claims and fraud overpayments for his EUC claim. 

Claimant appealed and, before the Referee, although Claimant cross-examined the 

Department’s witnesses,7he did not present testimony of his own.8

 

7

In addition to the testimony of Bonnie Haas, the Department also presented the 

testimony of Kimberly Richmond who authenticated several documents that were later entered 

into the record.

8 We note though that when the Department initiates proceedings that result in a 

suspension of benefits because of self-employment, it carries the burden. See McKean v. 

Unemployment Compensation Board of Review, 94 A.3d 1110, 1112 (Pa. Cmwlth. 2014).
6

To satisfy its burden, the Department presented the testimony of 

Bonnie Haas (Haas), the author of the Fraud Investigation Report, who testified 

that after Claimant’s separation from employment with Oxford Management, on 

July 27, 2010, he prepared and filed all paperwork with the Pennsylvania 

Department of State to incorporate Hindi Beginnings Inc. (Hindi) and payed a 

$195.00 fee from his personal account. Claimant also signed the majority of 

Hindi’s PA Form UC-2, Employer’s Report for Unemployment Compensation, 

which reported $0.00 in earnings for the business. Although Krisandra Strausser is 

listed as sole owner of Hindi in these incorporation documents and Claimant is 

listed as Hindi’s Vice President, Secretary and Chief Financial Officer, Hindi’s 

bank account records at Wells Fargo list Claimant as an “owner” of Hindi and 

Claimant is the only person named on Hindi’s bank account at Bank of America. 

Notably, Claimant established both of Hindi’s bank accounts and signed checks on 

behalf of Hindi. He created Hindi’s official website, submitted various 

applications for establishing its credit and business investments, and signed Hindi’s 

checks to pay labor costs. Checks were issued from Hindi’s bank account to cover 

rent costs for Claimant’s joint residence with Krisandra Strausser.

9

Haas further testified that the documentation and testimony she 

obtained during her investigation demonstrated that Claimant made substantial 

earnings while he was receiving UC, EUC and state extended benefits during the 

claim weeks ending July 31, 2010, through March 17, 2012. Claimant admits that 

he called the Department’s amnesty hotline on August 30, 2013, to report that he 

 

9 According to Claimant’s brief, Krisandra Strausser was Claimant’s fiancée.
7

actually earned $600.00 per week from Hindi from January 1, 2011, through April 

1, 2011. A 1099-form was also submitted to the Department indicating that he 

earned $8,999.00 for the 2011 tax year. Claimant admitted to Haas that he 

performed auto repairs and snow removal for Hindi. After conducting her 

investigation, Haas verified that Claimant entered into a contract with the City of 

Nanticoke in 2011/2012 for snow removal and that he earned $350.00 in this 

capacity. Several phone calls to different individuals revealed that Claimant did 

automotive repairs for cash payments. Claimant also made various purchases at 

auto part stores that appeared to be related to automotive repair.

The Referee issued three orders affirming the Service Center’s 

determination. As pertinent, the Referee determined that Claimant was ineligible 

for benefits because he was self-employed, finding:

[1.] The claimant had an investment in the 

business/corporation Hindi Beginnings Inc.

[2.] The claimant was at risk of sustaining a profit or loss.

[3.] The claimant was free from the direction and control 

of others in performance of his corporate duties with 

Hindi Beginnings Inc.

[4.] The claimant is customarily engaged in an 

independently established trade, occupation, profession 

or business.[10]

 

10 R. Item No. 12, Referee’s Decisions/Orders, dated 8/18/2014 (Ineligible w/ Fraud and 

Fault Overpayments).
8

The Referee imposed fault and fraud overpayments because Claimant: falsified his 

application for unemployment compensation benefits and/or deliberately withheld 

material information in order to obtain regular UC benefits; deliberately omitted 

material facts and/or provided false information to the Service Center for the 

period of time in which he was receiving EUC benefits; and failed to inform the 

Service Center that he was engaged in self-employment and received earnings for 

work while receiving state extended benefits. Claimant appealed to the Board.

The Board issued three separate orders affirming the Referee’s 

determinations relating to Claimant’s ineligibility for benefits and adopting and 

incorporating all of the Referee’s findings and conclusions. However, 

notwithstanding the adoption of the Referee’s findings and conclusions, and 

without providing any further analysis or explanation, the Board modified the 

Referee’s determination of fault and fraud overpayments to non-fault and nonfraud overpayments.

The Department then filed a request for reconsideration, explaining in 

pertinent part:

As detailed in the Referee’s decision, Claimant withheld 

information from the Department regarding his selfemployment and earnings in order to obtain 

unemployment compensation benefits. He organized and 

played a substantial role in the operation of [Hindi], in 

addition to providing auto repair and computer services 

to the company, beginning just after he was separated 

from employment. He was an officer of the company, 

signed its checks, established credit with its suppliers, 

and opened bank accounts in its name. He also failed to 

report his work as a provider of snow plowing services to 
9

the City of Nanticoke, and earnings he received from 

Hindi and the City of Nanticoke. Claimant affirmatively 

indicated he was not self-employed and was not 

receiving payments at times when he was so working and 

being paid. In addition, he even admitted to the 

Department’s witness that he falsified information 

regarding his work and receipt of payments in 2011.

* * *

The evidence submitted by the Department all points to 

Claimant knowingly providing false information in order 

to obtain benefits. In addition, his failure to testify to 

defend himself should corroborate the Department’s 

evidence and erase the equivocal nature of any evidence 

regarding whether he knowingly provided false 

information in order to obtain UC benefits as stated 

above in Commonwealth v. $23,300.00 U.S. Currency[, 

733 A.2d 693, 697-98 (Pa. Cmwlth. 1999)].

(R. Item No. 17 Department’s Request for Reconsideration, dated 10/23/2014). 

The Board granted the Department’s request, vacating the orders and inviting the 

parties to submit briefs.11

After briefs were submitted, the Board affirmed the Referee’s 

decisions, including the Referee’s assessments of fault and fraud overpayments. In 

doing so, the Board, once again, adopted the Referee’s findings and conclusions in 

their entirety. Claimant then filed these petitions for review.12

 

11 Claimant retained an attorney at this point for the purpose of submitting a brief to the 

Board on his behalf. However, Claimant now petitions pro se for review.

12 Our scope of review of the Board’s decision is limited to determining whether an error 

of law was committed, whether constitutional rights were violated, or whether the necessary 

(Footnote continued on next page...)
10

II.

A.

On appeal,13 Claimant initially contends that the Board abused its 

discretion by granting the Department’s motion for reconsideration because it 

lacked good cause to do so because the Department was not alleging new evidence 

or changed circumstance but rather the sole purpose was for reconsidering 

credibility issues pertaining to Claimant’s refusal to testify at the Referee’s 

hearing.

Regarding reconsideration, the Board’s regulations provide:

(a) Within 15 days after the issuance of the decision of 

the Board, as may be determined by the provisions of § 

101.102 (relating to form and filing of application for 

further appeal from decision of referee), any aggrieved 

party may request the Board to reconsider its decision 

and if allowed, to grant further the opportunity to do the 

following:

 

(continued...)

findings of fact are supported by substantial evidence. Rock v. Unemployment Compensation 

Board of Review, 6 A.3d 646, 648 n.5 (Pa. Cmwlth. 2010).

13 At the outset, Claimant contends that the Board violated his due process rights because 

the Board failed to mail a copy of its August 26, 2015 orders to his then-attorney, which caused 

him to file his petition for review late because he was incarcerated at the time. Although the 

Board concedes that Claimant’s petitions for review were filed late as a result of this error, the 

Board notes in its brief that it has not, and will not, file a motion to dismiss Claimant’s petitions

for review. Moreover, a nunc pro tunc appeal may be allowed where there has been a breakdown 

in the administrative process, Cook v. Unemployment Compensation Board of Review, 671 A.2d 

1130, 1131 (Pa. 1996), such as the Board’s admitted failure to timely mail copies of the orders to 

Claimant’s then-attorney.
11

(1) Offer additional evidence at another hearing.

(2) Submit written or oral argument.

(3) Request the Board to reconsider the previously 

established record of evidence.

(b) The requests will be granted only for good cause in 

the interest of justice without prejudice to any party. 

The parties will be notified of the ruling of the Board on 

each such request. The request for reconsideration and 

the ruling of the Board shall be made a part of the record 

and subject to review in connection with any further 

appeal to the Commonwealth Court.

34 Pa. Code § 101.111 (emphasis added). “In determining whether ‘good cause’ 

exists, the [Board] must consider whether the party requesting reconsideration has 

presented new evidence or changed circumstances or whether [the Board] failed 

to consider relevant law.” Laster v. Unemployment Compensation Board of 

Review, 80 A.3d 831, 834 (Pa. Cmwlth. 2013) (quoting Ensle v. Unemployment 

Compensation Board of Review, 740 A.2d 775, 779 (Pa. Cmwlth. 1999)) 

(emphasis added).

Contrary to Claimant’s contention, the Board had good cause to 

reconsider whether, as a matter of law, it was required to affirm the Department’s 

imposition of fault and fraud overpayments. While Claimant’s lack of testimony 

was asserted in the Department’s motion for reconsideration, this was only set 

forth for the purpose of establishing a negative inference when determining his 

intent. See Commonwealth v. $23,300.00 U.S. Currency, 733 A.2d 693, 697-98 

(Pa. Cmwlth. 1999). The Department’s motion specifically stated that it was not 

seeking reconsideration of credibility determinations “[b]ecause the only testimony 
12

presented was that of the Commonwealth, there was no credibility determination to 

be made.” (R. at Item No. 17 Department’s Request for Reconsideration, dated 

10/23/2014) (citing Petrone v. Unemployment Compensation Board of Review, 557 

A.2d 1118 (Pa. Cmwlth. 1989)).

As the Board explained in its modified orders, the Department 

“requested reconsideration, asserting that a fault overpayment was appropriate 

considering the Referee’s findings that the claimant had knowingly provided false 

information in order to obtain benefits. . . . [T]he Board granted reconsideration . . 

. for the purpose of considering the Department’s arguments.” (R. Item No. 24, 

Board’s Orders, dated 8/26/2015 (Ineligible w/ Fault and Fraud Overpayments).)

B.

Claimant next contends that the Board erred when determining that he 

was ineligible for benefits because he was self-employed since the evidence does 

not establish that he owned stock in or had control over Hindi or purchased 

equipment for Hindi. Because the term “self-employment” is not defined in the 

Law, we look to the definition of “employment” in Section 4(l)(2)(B) of the Law:

Services performed by an individual for wages shall be 

deemed to be employment subject to this act, unless and 

until it is shown to the satisfaction of the department 

that—(a) such individual has been and will continue to be 

free from control or direction over the performance of 

such services both under his contract of service and in 

fact; and (b) as to such services such individual is 

customarily engaged in an independently established 

trade, occupation, profession or business.
13

43 P.S. § 753(l)(2)(B). In order for an individual to be deemed “self-employed,”

both prongs of Section 4(l)(2)(B) of the Law must be satisfied. Silver v. 

Unemployment Compensation Board of Review, 34 A.3d 893, 896 (Pa. Cmwlth.

2011).

Notably, Claimant does not dispute that the Board found Hindi was 

incorporated by Claimant when he began receiving benefits; that he was Hindi’s 

Vice-President, Secretary and CFO; that he signed checks on behalf of Hindi; that 

he was listed as the corporation’s “owner” for one of its bank accounts; or that he 

received unreported earnings from Hindi and other sources while he was receiving 

benefits. All of this establishes that Claimant had an investment in Hindi, was at 

risk of sustaining a profit or loss, was free from the direction and control of others 

in performance of his corporate duties with Hindi and was customarily engaged in 

an independently established trade, occupation, profession or business. This is

more than substantial evidence to support the Board’s determination that Claimant

was ineligible for UC, EUC and state extended benefits because he was selfemployed.

C.

Finally, Claimant contends that the Board erred when imposing fault

and fraud overpayments. Section 804(a) of the Law provides that “[a]ny person 

who by reason of his fault has received any sum as compensation under this act to 

which he was not entitled, shall be liable to repay . . . a sum equal to the amount so 

received by him. . . .” 43 P.S. § 874(a). Section 4005 of the EUC Act provides that 

an overpayment of EUC benefits shall be classified as fraud where an individual 
14

“knowingly has failed . . . to disclose a material fact, and as a result of such . . . 

nondisclosure such individual has received an amount of emergency 

unemployment compensation under this title to which such individual was not 

entitled.”

The word “fault” within the meaning of Section 804(a) connotes an 

act to which blame, censure, impropriety, shortcoming or culpability attaches. 

Fugh v. Unemployment Compensation Board of Review ___ A.3d ___ (filed

January 18, 2017); Summers v. Unemployment Compensation Board of Review,

430 A.2d 1046, 1048 (Pa. Cmwlth. 1981). To find fault, the Board must make 

some findings with regard to claimant’s state of mind. Maiorana v. Unemployment 

Compensation Board of Review, 453 A.2d 747, 749 (Pa. Cmwlth. 1982). Conduct 

that is designed intentionally to mislead the UC authorities is sufficient to establish 

a fault overpayment. Greenawalt v. Unemployment Compensation Board of 

Review, 543 A.2d 209, 211 (Pa. Cmwlth. 1988). Where a claimant fails to provide 

truthful information to the Service Center, Amspacher v. Unemployment 

Compensation Board of Review, 479 A.2d 688, 692 (Pa. Cmwlth. 1984), or 

provides an intentional misstatement on an application for benefits, the imposition 

of a fault overpayment is appropriate. Matvey v. Unemployment Compensation 

Board of Review, 531 A.2d 840, 844 (Pa. Cmwlth. 1987).

Claimant contends that the evidence and testimony presented failed to 

establish that he knowingly and/or intentionally failed to disclose his earnings to 

the Department because he attempted to correct his reported earnings to the 

Department, undermining any finding that he held the requisite level of intent to 
15

assign fault and fraud overpayments. What this argument ignores is that the Board 

chose to discredit Claimant’s assertion that he attempted to correct his reported 

earnings given his continued and repeated inaccuracies and omissions were 

knowing or intentional and there is ample record evidence to support its 

determination in this regard. On numerous occasions, Claimant indicated on his 

UC, EUC and weekly state extended benefits forms that he was not working or 

receiving earnings of any kind when he was, in fact, receiving such work and 

earnings from Hindi. Moreover, he had been specifically advised on each occasion 

that the failure to report all work and earnings could result in prosecution. Such an 

extended course of conduct clearly supports the Board’s determinations regarding 

Claimant’s state of mind.

Accordingly, the Board’s orders are affirmed.14

_________________________________

DAN PELLEGRINI, Senior Judge

 

14 Included in Claimant’s brief is a letter to Claimant dated November 11, 2015, from 

Claimant’s former-counsel, a four-page excerpt from a transcript in criminal court, and two

pages taken out of an investigative report by the Office of Attorney General regarding Claimant. 

On August 3, 2016, the Board filed an Application for Relief in the Form of a Motion to Strike 

Extra-Record Evidence Attached to Claimant’s Brief. By Order dated August 16, 2016, this 

Court directed that the motion be submitted with the merits. Because the three documents 

attached to Claimant’s brief are not part of the record made before the Board, we strike those 

portions of Claimant’s brief.
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Frank James Capozzi, Sr., :

Petitioner :

:

v. : Nos. 2283, 2284, 2285 C.D. 2015

:

Unemployment Compensation :

Board of Review, :

Respondent :

O R D E R

AND NOW, this 19th day of January, 2017, it is hereby ordered that 

the orders of the Unemployment Compensation Board of Review dated August 26, 

2015, are affirmed, and the Unemployment Compensation Board of Review’s 

Application for Relief in the Form of a Motion to Strike Extra-Record Evidence 

Attached to Petitioner’s Brief is granted.

_________________________________

DAN PELLEGRINI, Senior Judge