Alleged $1.2 Million in Workers’ Comp Fraud Leads to Arrest
Husband and Wife Charged With Workers’ Comp Premium Fraud
Owners of a drywall business were arrested on charges of felony theft and workers’ comp premium fraud totaling an estimated $1.2 million in unpaid insurance premiums, according to the Louisiana Workforce Commission.
The Louisiana Insurance Fraud Task Force, after searching the couple’s Lafayette home uncovered evidence of concealed payrolls and misrepresentation of workers to avoid the full payment due of workers’ compensation insurance premiums.
According to arrest records, (a joint effort of LWC, Louisiana State Police, Louisiana Department of Insurance and the Louisiana Attorney General’s Office) the task force received a tip from a representative of the Louisiana Carpenter’s Regional Council (carpenter’s union) based on financial reports and other records found in bags of trash left around the perimeter of the couple’s home.
The resulting investigation showed the company reported around 35 employees with a payroll of about $145,347 when it should have reported more than 300 employees and a payroll of more than $4.2 million for 2007 and 2008.
This case in only one of the LWC current investigations. LWC has made over seven arrests throughout the year as part of the task force investigating suspected employer and employee fraud. Through the second quarter of 2009, nearly 1,600 investigations were completed by the LWC Office of Workers’ Compensation Fraud and Compliance Units, with 13 cases referred to the AG’s office for possible prosecution.
Much of the work is done by analyzing claims processed for workers’ comp and unemployment insurance and reviewing employer quarterly records.
The bottom line is it is illegal for businesses to misrepresent the status of their employees in an effort to avoid paying workers’ compensation insurance, payroll taxes and other employee-related costs in Louisiana.
“All employers doing business in Louisiana are required to provide workers’ compensation coverage for their employees. Businesses not covering their employees are shortchanging those employees and driving up costs for other businesses,” said Curt Eysink, executive director of the Louisiana Workforce Commission. “This is an important step in creating a level playing field for all businesses to compete fairly.” (workersxzcompxzkit)
Non-compliance results in a $250 fine per employee per incident, ever increasing fines, an injunction from doing business in Louisiana and jail time.
Reposted with Permission Visit LexisNexis for more information and full reports.
The latest workers’ comp fraud blotter see
http://law.lexisnexis.com/practiceareas/Workers-Compensation-Law-Blog/Workers-Compensation/Workers-Comp-Fraud-Blotter-9112009—Recent-Arrests-Charges–Convictions
We are accepting short articles* (200-600 words) on WC cost containment. Contact us at: [email protected]. *Non-compensable.
Try Our FREE WC IQ Test: http://www.workerscompkit.com/intro/
WC Books: http://www.reduceyourworkerscomp.com/workers-comp-books-manuals.php
Follow Us On Twitter: www.twitter.com/WorkersCompKit
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker about workers’ comp issues.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact [email protected]
