Typically, I see a LOT of people with no intention of working or looking for work collecting unemployment insurance payments. For example, we have summer workers who take the winter off but still collect unemployment in the winter as if they were looking for work. Most state governments have no desire to hear about this. In fact, in California (at least a number of years ago) if you call the unemployment fraud number the only kind of complaint they take is reports of employer fraud. You can't actually report employee fraud, and the one time I tried to do so I was threatened by a California State employee with dire legal consequences for "harassment" and "retaliation".
The new dodge I saw the other day is when Company A goes to an employee of Company B and offers to hire them away for higher pay. When the employee leaves B for A, A tells them that they should file for unemployment, claiming they were forced out rather than quit (essentially constructive termination). In most states, if an employee says one thing (I was forced out!) and an employer says another (She quit!), the employee is almost always believed unless the employer can bring an absurd amount of written evidence to the table to prove otherwise.
Anyway, having convinced the state the employee was terminated rather than quit, the employee collects unemployment benefits. Then, company A pays the employee in cash under the table an amount per hour less than minimum wage but which in combination with the state unemployment payments does indeed add up to more than they were making at B. They end up paying less than minimum wage and pay no employment taxes (since it is cash under the table) and the state makes up the difference with an unemployment check. Company B, by the way, sees its unemployment taxes go way up because these rates are experience-based.