By reading adjudicated workers compensation fraud case histories, reviewing state statistics for investigations, prosecutions, restitutions, fines, and imprisonments it quickly becomes clear that the criminal justice system often falls short in successful fraud case resolution. Some reasons for this failure are:
- Public Apathy
- Judicial Leniency and lack of Mandatory Sentences
- Lack of Funding for Investigation and Enforcement
- Weak Evidence
- Insufficient and Poorly Trained Staffs
Poor Documentation Allows for Adverse Interpretation
Because of the frequent failures in criminal justice, just complying with mandatory reporting, may not get the desired conviction and restitution. In most situations where a poor resolution occurs, it is poor documentation and prosecution that allows employees to profit and escape responsibility for fraud stealing.
- A poorly investigated and documented record allows the claimant attorney to mitigate, limit, or have the case dismissed.
- Investigations with unimpeachable witnesses, strong written and properly documented records will strongly limit the wiggle room for claimant attorneys and judicial interpretation.
- Restitution that can be obtained through impounding employee assets, other sources of income, and/or current employment must be proven available. Such assets allow for prompt inducement for full recovery once the employee faces the loss of these tangibles.
- The fraud committing employees must be proven guilty by the preponderance of the evidence, as they are presumed innocent until then.
When fraud is suspected the employer and claim unit management should have a confidential meeting to prepare a confidential plan of action for investigation, prosecution, and restitution.
The process needs development of evidence that will stand up to defense challenges, cross-examination, and limit judicial interpretation or deviation.
To assist in the investigation, it is advisable to employ a private investigator (PI). The PI needs a proven track record of factual development that has a high conviction success ratio. It should be 85% to 90%.
Securing a Private Investigator and Points to Investigate:
Explore several Private Investigative Organizations. Develop a well-planned interview that covers the points discussed in this memo, and seek legal guidance for even more points to cover.
- Always screen the applicants
- Contact all references
- Have the applicants produce a current list of successful as well as lost cases.
Research court and other public records for the cases that verify the applicant PI successes.
- The PI needs to be discreet and know what can be legally obtained when interviewing fellow employees, neighbors, family members, doctors, employers, as well as securing public and private records. Any step that could be interpreted as entrapment must be avoided. Actual direction by a criminally trained attorney is recommended.
- A PI needs or knows how, to gain access to criminal records, credit records, property records, employment records, medical records, bank records, motor vehicle records, investment records, insurance records, and educational records. These sources should develop the employees working capacities, assets available for restitution, prior adjudicated issues, and possible associates with knowledge of the employee’s wrongdoings.
- Proper employee identification must be established before giving carte blanche authority to proceed on full investigation. It will be necessary to confirm that the PI has the right person identified for name, address, and physical appearance. The best method is to have someone who knows the employee do the identity for the PI. If necessary, have the employee come to the adjuster’s office for some legitimate reason.
Launch the Case
When the PI investigation is complete, a meeting with the adjusting unit management, the employer, the PI, and a criminal attorney should be held. Review all the evidence and play devil’s advocate to challenge the results. When all are in agreement that the evidence is sound, file the claim with the local prosecutor’s office with copies of all the documentation.
Request the prosecutor move the case swiftly to the judiciary for resolution.
Author Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is the founder & lead trainer of Amaxx Workers’ Comp Training Center, which offers the Certified Master of Workers’ Compensation national designation.
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.