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Lansing — A University of Michigan law professor who helped spearhead reforms after a false fraud fiasco is taking over the state Unemployment Insurance Agency.

Steve Gray, director of Michigan Law's Unemployment Insurance Clinic, will begin leading the agency June 3, the Department of Talent and Economic Development Department announced Monday.

Stephanie Beckhorn, acting director of the department, praised Gray and called it an “honor to have someone with such intense dedication and understanding of Michigan’s unemployment system stepping up to lead the Unemployment Insurance Agency.”

Gray was a key player in 2017 legislation to reform the agency amid turmoil. The agency had relied on an error-prone computer system to identify suspected fraud without human review but later reversed more than 40,000 determinations made between October 2013 and August 2015.

The package, signed by former Gov. Rick Snyder, reduced the state’s highest-in-the-nation penalties for unemployment fraud and delayed interest penalties to allow for due process, but it did not require compensation for those wrongly penalized in the past, a point of contention among legislators.

The legislation also delayed interest penalties, prohibited interest on over-payments due to agency mistakes, allowed fraud determinations to be reconsidered for up to three years and gave those accused of unemployment fraud access to an advocacy assistance program.

Gray, a 57-year-old Flint native who now lives in Ypsilanti, previously served as general manager of the Michigan Unemployment Insurance Project nonprofit and as managing attorney at the Michigan Poverty Law Program.

“Layoffs and closures are often a challenging time for those affected by the unexpected turn in tide,” Gray said in a statement from the department that announced his hire.

“As director of the Unemployment Insurance Agency, I am committed to continual growth and improvement in the approach and policy that protects and serves both Michigan employees and their employers so they can easily and effectively navigate these waters.”

He replaces Michelle Beebe, who took over the agency two years ago and helped implement reforms. She left for a new job in April as project coordinator for the National Association of State Workforce Agencies National Integrity Center.

The Michigan Supreme Court last month revived a potential class-action lawsuit against the state by plaintiffs who were falsely accused of fraud. The agency announced in August 2017 that it was refunding falsely accused claimants more than $20.8 million. As of last fall, the state had processed almost all of the refunds, but plaintiffs contend monetary damages extended beyond the refunds paid by the state.

joosting@detroitnews.com

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