Fraud & Abuse Archives - Work Comp Roundup

Worker Cut Down After Fraudulently Working at Lawn Care Business

February 1, 2013 by Michael B. Stack Leave a Comment

Caught On Camera Working At Lawn Care Business

A Columbus, Ohio man has been sentenced for workers compensation fraud after the Ohio Bureau of Workers Compensation (BWC) caught him on camera working at his lawn care business while he claimed he was unable to work due to a workplace injury.

Michael Dickerson was sentenced in a Franklin County courtroom and must repay nearly $30,000 in restitution and investigative costs.

"Despite claiming to be permanently disabled, Mr. Dickerson was observed performing physical labor inconsistent with his supposed condition," said BWC Administrator/CEO Steve Buehrer. "As a business owner, he should have understood the potential for severe consequences of misrepresenting his ability to work."

Received Anonymous Allegation

BWC's Special Investigations Department (SID) received an anonymous allegation that Dickerson was operating a lawn care business while receiving workers' compensation benefits following a workplace injury. The allegation also indicated Dickerson was asking his customers to pay him in cash so he would not be traced by BWC.

SID conducted surveillance on multiple occasions and observed Dickerson using a push mower, riding mower, leaf blower and weed trimmer at residential, retail and church properties. This work activity all occurred while Dickerson was receiving Permanent Total Disability. SID interviewed customers who confirmed they paid Dickerson by check and cash for mowing their lawns. Dickerson acknowledged during an interview that he knew he should not have been working.

Dickerson was indicted in June and pleaded guilty to one felony count of workers comp fraud in November.

Sentenced to 12 Months in Prison & Fines

He was sentenced to 12 months in prison, suspended for a three year period of community control. He was also ordered to pay $18,673.06 in restitution and $10,000 in investigation costs.

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.

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

Filed Under: Workers Comp News Tagged With: Fraud & Abuse, lower your workers comp, reduce your workers comp, WC Fraud, workers comp, Workers Comp Fraud, Workers Compensation

Workers Comp Fraud Physiotherapist Pleads Guilty

January 31, 2013 by Michael B. Stack Leave a Comment

Jurry Sehunoe, 34, the self-confessed fraud physiotherapist will be sentenced by the Pretoria (South Africa) Specialized Commercial Crimes Court for defrauding the Department of Labour’s (DoL) Compensation Fund (CF) $200,000, according to South Africa’s Department of Labour.

Magistrate N. Setshogoe confirmed in court recently that the State had received the outstanding pre-sentencing reports from the Correctional Services and social workers, which were key in the sentencing process.

Pleaded Guilty in October 2011

Sehunoe, from Rustenburg in the North West, pleaded guilty in October 2011 to defrauding the Department of Labour of $200,000. He was arrested in 2010 together with fellow co-accused, former Department of Labour employees – Maxwell Ramaphosa and Samuel Mfeleng. The three men first made their appearance in Court in March 2010.

After what appears to be an initial indulgence in ‘delaying tactics’ by the accused, Sehunoe broke ranks and made a U-turn in October last year and pleaded guilty.

Sehunoe pleaded guilty to 15 counts of fraud and 26 counts of money laundering.

In a separation of trial, Ramaphosa and Mfeleng’s matter was transferred to the Pretoria Magistrate’s Court. They have since pleaded not guilty, and were due to appear in Court again, both out on a bail of $3,000.

In his statement of admission of guilt, Sehunoe, through his legal representative, Advocate Keitumetsi Mogale, admitted to having received huge amounts of money that were channeled into his personal bank account and that of his businesses which included a driving school and a maintenance/construction company.

Monies Transferred to Personal Bank Account

In the statement Sehunoe further told the Court that the monies were allegedly being transferred to his account by fellow alleged co-accused Ramaphosa and Mfeleng. He said he had earlier informed them that he was no longer comfortable with their continued transfer of substantial sums of money into his accounts which he felt “it is not done in good faith and not entitled to”.

Sehunoe has since been told by the Court to compensate the Department of Labour for the money deposited ‘unfaithfully into his accounts.

The Asset Forfeiture Unit (AFU) in the Office of the National Director of Public Prosecutions added to Sehunoe’s woes when it announced it had made an application for the seizure of his assets in terms of the Prevention of Organized Crime Act.

In February, the AFU issued a statement that in terms of the Organised Crimes Act it has seized Sehunoe’s property worth $200,000 which included a house, household items as well as two vehicles.

Submitted Fictitious Claims

The fraudsters’ misdeeds include working in collaboration with alleged fellow co-accused to swindle the Department of Labour millions of dollars by submitting fictitious claims and changing personal details of claimants and by-passing electronic systems by using trickery processes to channel payments into their own accounts.

The Compensation Fund is a public entity of the Department of Labour. The Fund provides cover for workers injured at work or for diseases sustained during work.

Contact: mstack@reduceyourworkerscomp.com.

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

Filed Under: Workers Comp News Tagged With: Combating Fraud, Fraud & Abuse, lower your workers comp, reduce your workers comp, WC Fraud, workers comp, Workers Comp Fraud, Workers Compensation

Employee Paying the Piper for Workers Comp Fraud

January 17, 2013 by Michael B. Stack Leave a Comment

A South Carolina man has been ordered to repay the Ohio Bureau of Workers Compensation (BWC) more than $140,000 for holding several jobs and concealing earnings while receiving permanent disability benefits, according to BWC.

Pleaded Guilty to Workers Comp Fraud

Joseph Curto of Conway, SC, recently pleaded guilty to workers comp fraud and was sentenced in a Franklin County courtroom.

“Working multiple jobs and intentionally concealing income to continue receiving workers comp benefits is a crime in Ohio, no matter where you reside,” said BWC Administrator/CEO Steve Buehrer. “We are pleased to uncover fraud cases like this, while reserving permanent disability for those who truly cannot work due to their occupational injury or illness.”

Received Report of Additional Employment

Curto was injured on the job while working for an Ohio based company and awarded Permanent Total Disability benefits. The Intelligence Unit in BWC’s Special Investigations Department identified a possible issue after receiving a report that Curto was employed by a trucking firm.

Agents traveled there to South Carolina and confronted Curto at the job site. He confessed to working for Unlimited Sanitation in Conway. He also admitted to working for several other employers since 1999, including C & C Trucking, Prestige Trucking, White Trucking, Winterplace Ski Resort, O’Reilly Auto Parts and Natural Nutrients.

Used Wife’s Social Security Number to Conceal Income

Curto also admitted that he used his wife’s Social Security Number to report his earnings in an effort to conceal his income. The Social Security Administration, Office of Inspector General provided employment information and assisted in the investigation.

Curto was indicted in February and pleaded guilty in August. He was sentenced in early November to 18 months incarceration, suspended for four years of community control.

He must also pay restitution in the amount of $143,203.33 and maintain viable employment.

Contact: mstack@reduceyourworkerscomp.com.

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

Filed Under: Workers Comp News Tagged With: Employees and Fraud, Fraud & Abuse, WC Fraud, workers comp, Workers Comp Fraud, Workers Compensation, workers compensation fraud

Washington State Man May Get Decade Behind Bars

January 16, 2013 by Michael B. Stack Leave a Comment

Washington State Man May Get Decade Behind Bars

A Washington State man certainly wasn’t the apple of a superior court’s eyes recently, charged with first degree felony theft for illegally collecting workers compensation benefits.

As the Department of Labor & Industries (L&I) points out, Doyle Ronald Wheeler, 36, of Spokane, reportedly obtained benefits during the period of 2008 to 2011 on a workplace-injury claim for a neck and back injury.

Wheeler’s benefits ceased once an investigation deemed he was behind the operation of his own business -The Pensmith, Ammo Head Design and Ammo Head Hydrographics – this while collecting workers comp.

Claimant Said He Was Unable to Work

According to Wheeler, he was unable to work once a slow-moving pickup truck backed into him at his workplace, Toby’s Body and Fender.

According to a videotape of the accident, Wheeler displayed no signs of injury after contact with the vehicle. Videotapes taken following the accident by L&I investigators demonstrate Wheeler coming to his physical therapy appointments, where his shoulder seems to sag and his movements stiffen as he nears the office. Not long after his physical therapy appointments, Wheeler goes back to moving around with ease. Wheeler was arraigned recently in Spokane County Superior Court.

Jail, Fine Could Be Severe

As he awaits his fate, Wheeler could receive a maximum sentence of up to a decade in prison and a fine of up to $20,000.

The court could also order Wheeler to repay the more than $113,000 in benefits gathered via fraud. Given both the potential jail time and fine, Wheeler could really see something to cause him pain.

Contact: mstack@reduceyourworkerscomp.com.

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

Filed Under: Workers Comp News Tagged With: Fraud & Abuse, Lowering Work Comp Costs, Reduce/Lower WC Costs, Reducing Workers Compensation Costs, WC Fraud, workers comp, Workers Comp Fraud, Workers Compensation

The RED FLAGS of Workers Comp Fraud

January 11, 2013 by Michael B. Stack Leave a Comment

A critical part of controlling workers’ compensation costs is to put into place solid investigation techniques. No matter how serious or minor a workplace injury, each case needs to be reviewed to identify any fraudulent claims and take appropriate action.

When communicating with employees make it clear that the company will:

· Immediately investigate each accident when it occurs to determine the root cause

· Identify corrective measures

· Watch for minor extensions of days out of work and outright fraudulent claims.

Review these Red Flags of Fraud and request an investigation if you suspect a claim is illegitimate or exaggerated.

Claimant Flags:

· Injury reported late, to an attorney or to the state commission beforereporting it to the employer.

· Fails to attend weekly meetings.

· Is uncooperative, e.g. refuses to try a transitional duty job.

· Is never home when you phone, especially during normal workday hours.

· Has only a postal box rather than a home address.

· Misses doctor appointments.

· Is known to perform seasonal activities, hobbies, or work.

· Has moved out of town or out of state.

· Disputes average weekly wage due to additional income.

· Files for benefits in a state other than the principle location.

· Disputes information supplied by the employer on “First Report of Injury” notice.

· Refuses to cooperate in claim investigation.

· Has an unstable work history.

· Has recently been terminated, demoted, or passed over for promotion.

· Has a prior history of injury management or liability claims.

· Makes excessive demands or is pressing for a quick settlement.

· Carries little or no health insurance.

Medical Flags:

· Medical reports are repetitive, indicating continuing, constant pain with conservative medical treatment

· The word “disproportionate” is used in medical reports

· The doctor mentions there is “facial grimacing”

· Positive “Waddell Tests” (test for low back pain) are mentioned

Workplace Flags:

· Employer experiencing labor difficulties (i.e., layoffs, strikes, walkouts).

· Tips from fellow workers, friends, or relatives.

· Insurance company wants to settle the claim for a huge amount of money.

“Things” just don’t ADD UP! Trust your gut, and if something seems off, be sure to check it out.

Contact: mstack@reduceyourworkerscomp.com.

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

Filed Under: Fight Workers Comp Fraud & Abuse Tagged With: Combating Fraud, Controlling Fraud, Fraud & Abuse, Lowering Work Comp Costs, Red Flags of Fraud, reduce workers comp, reduce your workers comp, Reduce/Lower WC Costs, Reducing Workers Compensation Costs, WC Fraud, workers comp, Workers Comp Fraud, Workers Compensation

California Father-Daughter Plead Guilty in Workers Comp Scam

January 9, 2013 by Michael B. Stack Leave a Comment

The California Department of Insurance recently reported that Jerry Buffington, 69, and Cynthia Russell, 47, offered guilty pleas in Kern County Superior Court to a single count each of workers compensation insurance premium fraud, along with eight counts each of tax evasion.

Ordered to Reimburse over $600,000

According to the report, the father and daughter were ordered to reimburse funds to California’s State Compensation Insurance in the amount of $475,100 and $127,899 to the Employment Development Department (EDD). The two are also required to serve a decade of probation.

Authorities noted that Buffington owned Safehome Inc., and his daughter served as chief financial officer.

In 2007, State Fund came across information that the company was underreporting its employee payroll to get away with paying the correct premium. After an audit, it was discovered that Safehome Inc. had not paid the proper amount of premiums for its workers comp policy to the tune of $477,285. Also, State Fund discovered the company was not operating in its proper classification, which was registration as an alarm company, yet a number of employees were operating as roofers. Authorities said the payroll tied to the roofing end of the business was never reported to both SCIF or EDD.

Both Convicted of a Single Felony Count

Buffington was convicted on a single felony count for violation of the insurance code section, false or fraudulent statement, four felony counts for failure to file return or report, and four felony counts for failure to gather or pay taxes.

Russell was convicted on a single felony count for false or fraudulent statement, four felony counts for failure to file return or report, and four felony counts for failure to gather or pay taxes.

Russell was also ordered to perform 400 hours of community service.

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

Filed Under: Fight Workers Comp Fraud & Abuse, Workers Comp News Tagged With: Fraud & Abuse, WC Fraud, workers comp, Workers Comp Fraud, Workers Compensation

California Employers Arrested for Fraud, Tax Evasion, and Grand Theft

December 11, 2012 by Michael B. Stack Leave a Comment

Fraud, Tax Evasion, and Grand Theft

The apparent owners of a Fresno-based commercial floor care business have been arrested for workers compensation premium fraud, tax evasion, and grand theft, according to state Insurance Commissioner Dave Jones.

Charged are Osvaldo Molina, 40, of Fresno; Fortino Galeno, 46, of Fresno; and Alicio Galeno, 41, of Los Angeles.

Molina and Fortino Galeno have each been charged with 61 felony counts and Alicio Galeno has been charged with 23 felony counts.

According to detectives from the San Joaquin Valley Premium Fraud Task Force, Floor Care Systems was incorporated in California in July 2002 by Molina, however, the investigation revealed that Fortino Galeno was the true owner of the business. Floor Care Systems operated in Fresno and Los Angeles counties, cleaning floors in supermarkets.

Under-reported $5,000,000 in Payroll

Investigators learned that between April 2007 and October 2011 Messrs. Molina and Galeno are suspected of under-reporting more than $5,000,000 in employee payroll to their insurance carrier.

The apparent fraud cost insurers an estimated $782,000 in workers comp premiums and caused the state to miss out on $187,000 in withholdings, according to Jones.

Detectives also found evidence indicating that Alicio Galeno failed to pay minimum wage to employees and locked employees inside their work area without proper supervision, Jones added.

The investigation into Floor Care Systems centered on the misrepresentation of employee payroll to insurance carriers reducing the proper premium, and improper reporting to the Employment Development Department.

Up to Five Years in Prison and $50,000

If convicted on all charges, Messrs. Molina and Fortino Galeno could receive up to one year in county jail, or receive two to five years in prison for each felony count or pay fines up to $50,000 or double the value of the fraud, or by both imprisonment and fine. Alicio Galeno could receive up to one year in county jail or state prison for each felony count.

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

Filed Under: Workers Comp News Tagged With: California, California Workers Comp Issues, Fraud & Abuse, reduce your workers comp, Reduce/Lower WC Costs, WC Fraud, workers comp, Workers Comp Fraud, Workers Compensation

Teachers Assistant Never Learned Workers Comp Fraud Does Not Pay

November 19, 2012 by Michael B. Stack Leave a Comment

Teachers Assistant Charged with Several Felony Counts

It appears someone did not learn the lesson that crime does not pay.

According to a report from the Los Angeles County District Attorney’s Office, a teaching assistant was taken into custody for several felony counts of workers compensation fraud.

The DA’s office noted that Gerard Padilla, 45, was arrested and charged with five felony counts of comp fraud. Padilla, who has been working with the Los Angeles County Office of Education, reportedly filed a claim alleging that he suffered a back injury while assisting to end a fight in a classroom.

Made Up Story About Injury from School Fight

Authorities learned that Padilla, who was working in the Antelope Valley Principle Administrative Unit, did not suffer any injuries as he claimed, nor did he provide any evidence of a work-related injury.

In March of 2009, Padilla reportedly went to a physician for a first evaluation, whereby he again noted he was injured in a school fight. A month later, he reportedly gave false statements related to the injury to an investigator. In December of that year at a deposition, he is alleged to have provided false testimony tied to the injury. In the end, investigators concluded that Padilla made up the story.

Could Be in State Prison Up to Five Years

If Padilla is found guilty on all the counts, he could be in state prison for up to five years.

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

Filed Under: Workers Comp News Tagged With: Fraud & Abuse, WC Fraud, Work Comp, workers comp, Workers Comp Fraud, Workers Compensation

Ohio Worker Guilty of Workers Comp Fraud

November 15, 2012 by Michael B. Stack Leave a Comment

Surveillance Caught Injured Worker Replacing Roof

An Ohio man was recently sentenced for fraud after pleading guilty to working as a landscaper and roofer while receiving workers comp benefits. The Ohio Bureau of Workers Compensation (BWC) conducted a surveillance operation and caught Thomas Hofus on camera replacing a roof.

“Workers comp is intended for those who cannot return to work while recovering from an injury, however, surveillance by our investigators showed Mr. Hofus was clearly capable of physical work,” said BWC Administrator/CEO Steve Buehrer. “BWC remains committed to putting a stop to cases like this that place employer dollars in the hands of those who are not honestly representing their ability to work.”

Receiving Temporary Total Disability

BWC’s Special Investigations Department (SID) acted on an allegation that Hofus was operating a curbing and landscaping business called World Class Curbing while he was receiving temporary total disability benefits for a prior workplace injury. Witness interviews, a review of financial records and surveillance videos confirmed he returned to work in violation with those benefits.

The evidence showed Hofus operated as a sales person at home and garden shows, provided on-site estimates for customers, supervised employees at job sites and participated in much of the physical work associated with landscaping and roofing.

Pleaded Guilty to Fifth Degree Felony

Hofus pleaded guilty to one count of workers comp fraud, a fifth degree felony, in Franklin County Common Pleas Court. He was ordered to pay restitution of $12,662.17 and sentenced to one year incarceration, suspended for three years of community control.

Terms of his probation include a substance abuse evaluation, any follow-up treatment recommended, and a requirement to maintain employment.

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

Filed Under: Workers Comp News Tagged With: Fraud & Abuse, Ohio BWC, Ohio WC, Ohio WC Law, WC Fraud, workers comp, Workers Comp Fraud

Oklahoma Women Could Not Handle The Truth, Busted For Work Comp Fraud

November 5, 2012 by Michael B. Stack Leave a Comment

Filed False Workers Comp Claim

Oklahoma Attorney General Scott Pruitt’s Workers Compensation Fraud Unit has filed a charge against a Woodward woman for allegedly filing a false workers compensation claim.

According to the charge filed in Oklahoma County District Court, Edith J. Wilcoxson, 59, submitted a claim in December 2007 alleging she injured her lower back, hips, right leg and right foot in May 2006, while working as a medic for Woodward County Emergency Medical Services. She filed a supplemental form in 2008 to add her neck as an injury.

Testified Under Oath to Validity of Injuries

Wilcoxson testified under oath at a workers comp hearing less than a year later that she never had received any previous injuries to her neck, and said she never had been told by a doctor she had problems with her neck, according to a news release from the Attorney General’s Office. She also testified in September 2008 she never had injured her neck in a motor vehicle accident.

Investigation Showed Pre-Existing Conditions

An investigation by the AG’s Office a number of medical reports showing Wilcoxson had been notified by doctors of degenerative disc disease and a bulging disc in her spine prior to 2006.

In May 1999, Wilcoxson was involved in a motor vehicle accident while working with Woodward Police Department and was admitted to Woodward Hospital, according to the Attorney General’s Office. Workers comp paperwork filed by Wilcoxson following the accident listed her head, neck and left shoulder as injuries sustained from the accident. She subsequently visited a number of doctors who confirmed neck injuries, but denied a recommendation for neck surgery in 1999.

Wilcoxson also testified in a February 2001 workers comp hearing she had sustained an injury to her neck as a result of the motor vehicle accident.

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.

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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.