Showing further evidence that crime does not pay, officials with the Ohio Bureau of Workers Compensation (BWC) recently reported 11 individuals were convicted of or pleaded guilty to charges related to defrauding the state’s compensation system in the month of December.
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The court actions stem from investigations conducted by BWC’s special investigations department (SID). From illegally receiving workers comp payments to running a business without comp coverage or under reporting it, a number of individuals have been arrested and charged within the last year.
“Our investigators wrapped up 2012 with 125 convictions of employers, injured workers, providers, and others who committed fraud against the State Insurance Fund,” said BWC Administrator/CEO Steve Buehrer. “Their work helps keep employers from having to cover the cost of fraudulent claims, non-payment of premium, illegal billing, or any other illicit schemes designed to cheat the system.”
Among those who ran afoul of the law for a variety of offenses:
Eric Renzhofer, dba ARS Construction Inc., (Bowling Green, Wood County) was found guilty Dec. 3 of workers comp fraud for altering his coverage certificate. SID received an allegation from a premium auditor that Renzhofer may be altering a certificate of coverage. While conducting an audit on an unrelated case, the auditor noticed the policy number listed did not match ARS Construction, Inc. The Employer Fraud team investigation found that Renzhofer altered a certificate belonging to another business to make it appear that his business (ARS Construction) had active coverage. Renzhofer confessed to altering the certificate and cooperated by providing business records to determine the premiums he owed. Renzhofer was ordered to pay fines of $250 and restitution.
Eugene Vaughn (Spencer, Medina County) was found guilty Dec. 28 on five felony counts of deception to obtain a dangerous drug after he was discovered doctor shopping. A pharmacy contacted SID and advised that Vaughn was receiving prescriptions from multiple insurers, including BWC. SID worked with the Medina County Drug Task Force on the investigation, which found Vaughn obtained narcotics from different doctors during the same prescription cycle, including prescription drugs paid by BWC. Vaughn also used multiple pharmacies to fill these prescriptions. Vaughn was sentenced in the Medina County Common Pleas Court to three years general supervision by the Adult Parole Authority, drug screening, and continued drug treatment. Vaughn’s driver’s license was suspended for six months with work privileges upon request. He must have only one prescribing doctor with those prescriptions verified by Adult Parole Authority.
Victor Figueroa (Columbus, Franklin County) pleaded guilty Dec. 13 to one count of workers comp fraud for working while receiving benefits. SID’s Intelligence Unit detected that Figueroa was earning wages from multiple employers during periods he was collecting Temporary Total disability benefits from BWC. The investigation found Figueroa worked for Fairfield Insulation and Qualiteck, Inc. while collecting these benefits. Figueroa was ordered to pay restitution of $9,653.70 and he paid in full at the sentencing. He was also sentenced to one day in jail, suspended for time served.
Danny Albert (Columbus, Franklin County) pleaded guilty Dec. 17 to one misdemeanor count of workers comp fraud for working while receiving benefits. SID received an allegation that Albert was working for Southeast Mental Health as a Resident Specialist while he was receiving benefits and was prohibited from working. The investigation found Albert was in fact employed with Southeast, Inc, and Stevens Building Services while receiving Living Maintenance and Temporary Total benefits. Evidence obtained during the investigation also showed that Albert intentionally misrepresented and withheld employment activity in order to continue collecting these benefits. Albert was sentenced to 180 days in jail, suspended for 12 months of community control, and ordered to pay $7,051.75 in restitution.
Sheldon Greene (Middletown, Butler County) pleaded guilty Dec. 6 to one felony count of workers comp fraud for working while receiving benefits. SID received an allegation that Greene had returned to work at Michael’s Dining and Jazz restaurant in Dayton. The investigation found Greene was working at Michael’s Dining and Jazz restaurant as a chef and was operating his own catering company, Liberty City BBQ, in the Cincinnati and Dayton areas while receiving BWC disability benefits. Greene appeared in the Franklin County Court of Common Pleas and the judge terminated the case after he repaid BWC $9,992.28.
Jerry Adams, dba Quaker Pool & Spa, (Calcutta, Columbiana) was found guilty Dec. 13 of one felony count of fraud for allowing his workers comp insurance coverage to lapse. BWC’s Employer Compliance Department attempted to work with Adams, owner of Quaker Pool & Spa, after he allowed his coverage to lapse. After multiple attempts, Adams still failed to submit outstanding payroll reports and the case was turned over to SID for a fraud investigation. Employer fraud team agents met with Adams and his accountant on multiple occasions and facilitated the receipt of all but one of the outstanding payroll reports. Adams was given instructions on how to request a payment plan in order to get the policy reinstated. However, Adams again failed to follow through. Adams paid $4,226.34 as a down payment and signed a Payment Plan with the Attorney General’s Special Counsel agreeing to pay the remaining balance of $11,495.50 over the course of the next year. His sentencing is scheduled for February 21, 2013.
Anil Nalluri, MD (Youngstown, Mahoning County) pleaded guilty Dec. 13 to one misdemeanor count of workers comp fraud for billing for services not rendered. SID began investigating Nalluri in 2003 after receiving a complaint from an injured worker that he was providing only 10 minutes of psychotherapy services during what was supposed to be a 45 minute session. The injured worker confronted Nalluri about the lack of care and Nalluri informed the patient that he would receive payment from BWC regardless of the treatment provided. Nalluri later removed the injured worker from treatment at the office and failed to provide the patient his medical records when requested. Agents conducted an undercover operation and observed several patients exiting the office very soon after arriving. An agent also posed as a patient, visiting Nalluri 12 times and capturing video supporting the allegation, including an appointment that lasted one minute. In another instance, BWC was billed for a 20 – 30 minute psychotherapy session that video showed lasted three and a half minutes and consisted primarily of discussions about the economy. After the undercover operation concluded, investigators conducted interviews with Nalluria’s employees and patients. A number of patients reported the services they received were less than adequate and often lasted just enough time for Nalluri to write a prescription. Nalluri was paid $71,669.62 in restitution and investigative costs. He was also voluntarily decertified as a BWC provider.
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: [email protected].
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