You Can Run, But You Can Not Hide in Work Comp Fraud

Invididuals Who Try and Cheat the System Get Caught

The bottom line is that sooner or later authorities will catch up to those individuals who try and cheat the system.

According to a report from the Maine Employers Mutual Insurance Company (MEMIC), a Mount Desert man must repay more than $9,000 and spend two weeks in an alternative sentencing program after offering a guilty plea late last month to workers compensation fraud. [WCx]

House painter Jeremy Laurendeau, 35, pleaded guilty to a Class D misdemeanor of theft by deception and will now pay $9,141 as restitution.

Started with Legitimate Claim

The fraudulent scheme began in April 2010 when Laurendeau legitimately dislocated his shoulder on the job while working for A Team Painting of Bar Harbor. He did not return to work and a year-long recovery followed. Over the course of that year, he periodically denied any earnings when asked by MEMIC and collected full wage replacement benefits.

Tried to Prolong Injury, Collect Comp, and Work Second Job

Laurendeau’s crime was unwittingly undone by his father who also worked for A Team and who mentioned to the company’s owner that his son had been “doing some stuff” on the island. One small town a hired investigator later, Laurendeau was discovered working odd jobs at a large estate where he earned thousands of dollars for his work. During this time, he had continued to report to MEMIC that he had no other earnings while collecting full workers comp benefit. Subpoenaed payment records from the estate served as the final piece of incriminating evidence.

“This is a great example of the slippery slope of insurance fraud. An injured worker fakes a prolonged recovery to continue collecting benefits, and then becomes tempted to make extra money on the side. They probably rationalize that as long as nobody knows, it’s okay,” said John Marr, senior vice president of claims at MEMIC. “But it’s not. Not to his employer. Not to the whole system that is linked financially to other business owners. Not to the honest injured workers who can suffer from the stigma of insurance fraud.” [WCx]

Jail time was not considered appropriate because Laurendeau has three young sons and painting and drywall skills that can be put to use helping nonprofit organizations, according to MEMIC.

“He sustained a legitimate injury,” officials added “Early on; we had no reason to question the legitimacy of his claim.”

Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

WORKERS COMP MANAGEMENT MANUAL: www.WCManual.com

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.