Tag Archives: fraud

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Pierce County, WA Landscaper Charged with Skipping Out on Workers’ Comp Coverage

          A Pierce County, WA landscaper has been charged with failing to pay workers’ compensation insurance after one of his employees was injured on the job.

           Kenneth Ivan Winters, 49, faces one count of doing business without workers’ comp insurance and seven counts of making false reports to the Department of Labor & Industries, according to charging papers. Each charge is a Class C felony with a maximum penalty of five years in prison and a $10,000 fine.

           The Lakewood man pleaded not guilty to the charges Wednesday, February 19, 2014 in Pierce County Superior Court. His trial was set for May 1.

           According to charging papers filed by the Washington Attorney General’s office, authorities were alerted to the case when an employee filed an on-the-job injury claim while working for Winters’ business, Executive Lawn Care, in October 2012.

           The worker told an L&I investigator that Winters, who was on site when the employee was hurt, threatened him and his family if he filed a claim with L&I, charging papers said. The employee said he had worked for Winters from 2002 until the day he was injured.

           Winters’ workers’ comp coverage had been revoked eight months earlier for failing to pay premiums. However, charging papers allege, he continued to employ the worker full time until the injury. Winters told an L&I investigator he started the business in 1990, and at one time had up to six employees. He said business slowed and his main employee was the worker who became injured, and occasionally the worker’s brother.

           As of Jan. 7, 2014, the employee’s claim has cost L&I more than $67,000 in medical expenses and lost wage payments, charging papers said.

           Businesses that don’t pay workers’ comp insurance gain an unfair advantage over companies that pay their fair share. A 2007 study found that an estimated 55,000 employers skipped out on paying $34.5 million in workers’ comp insurance in Washington state in 2006, causing legitimate employers to pay higher premiums.

         Washington state is one of the few states in the nation where employers and workers both pay a share of the workers’ compensation premiums.  The press release from the Department of Labor and Industries did not indicate whether this worker’s payroll deductions had continued even when his workers’ compensation coverage had lapsed.  If this was the case, this employer’s fraud would represent wage theft, as well.

         

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Spokane Restaurant Owner Charged with Theft of Nearly $250,000 in Workers’ Comp Payments

     The Washington State Department of Labor and Industries issued the following news bulletin with details of a recent fraud investigation:

A Spokane restaurant owner faces a felony theft charge alleging she defrauded the state of nearly $250,000 in workers’ compensation benefits over eight years while claiming she could not work.  In reality, a Department of Labor & Industries investigation found Wanitta Racicot, 69, was cooking, busing tables and performing other duties at a restaurant that she co-owns.

The Attorney General’s Office recently charged Racicot, of Spokane Valley, with one count of first-degree theft in Spokane County Superior Court. Racicot is scheduled to enter her plea to the charge on Sept. 4. According to court documents, Racicot filed for workers’ compensation with L&I in 2001, claiming she injured both of her arms while working at a restaurant. After opening her claim, she regularly signed official documents stating she was not employed and was unable to work due to her injury.

In August 2011, L&I launched an investigation after Racicot’s case raised red flags to a department employee, who was examining whether Racicot should be referred for a pension. During the investigation, Racicot told an investigator that her hands remained so damaged that she could not button shirts or put on earrings, court documents said. The same month, an investigator witnessed Racicot carrying groceries, busing heavy dishes, scrubbing the bar counter and doing other tasks at her Spokane business, Broadway Bar and Grill, on multiple days. In addition, Racicot’s current and former employees and business associates told the investigator that she had been working at the restaurant for more than five years, and one employee said she had been doing so since at least 2001.

The charge alleges Racicot fraudulently received $249,267 in time-loss benefits for replacement of lost wages from March 2003 until August 2011. First-degree theft carries a maximum penalty of 10 years in prison plus a $20,000 fine and costs.

     In addition to the criminal penalty and fines, I expect that an overpayment order with fraud penalties was also issued under the workers’ compensation claim, although this was not mentioned in the bulletin.  The Department is able to issue an order claiming an overpayment of the benefits paid incorrectly PLUS a penalty of up to 50% of the overpaid amount.  The criteria for meeting the legal burden of proof in a fraud case is pretty tough, for good reason, but when fraud is proven the penalties can be quite severe.

     The description of this case sounds like the Department has a solid case against the claimant.  However, not all fraud cases are as clear-cut.  If you find yourself facing an overpayment order, with or without allegations of fraud, contact an attorney for possible assistance with the fight to come.

 

Photo credit: Flavia_FF / Foter / CC BY-NC-ND

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Spokane Restaurant Owner Charged with Theft of Nearly $250,000 in Workers’ Comp Payments

     The Washington State Department of Labor and Industries issued the following news bulletin with details of a recent fraud investigation:

A Spokane restaurant owner faces a felony theft charge alleging she defrauded the state of nearly $250,000 in workers’ compensation benefits over eight years while claiming she could not work.  In reality, a Department of Labor & Industries investigation found Wanitta Racicot, 69, was cooking, busing tables and performing other duties at a restaurant that she co-owns.

The Attorney General’s Office recently charged Racicot, of Spokane Valley, with one count of first-degree theft in Spokane County Superior Court. Racicot is scheduled to enter her plea to the charge on Sept. 4. According to court documents, Racicot filed for workers’ compensation with L&I in 2001, claiming she injured both of her arms while working at a restaurant. After opening her claim, she regularly signed official documents stating she was not employed and was unable to work due to her injury.

In August 2011, L&I launched an investigation after Racicot’s case raised red flags to a department employee, who was examining whether Racicot should be referred for a pension. During the investigation, Racicot told an investigator that her hands remained so damaged that she could not button shirts or put on earrings, court documents said. The same month, an investigator witnessed Racicot carrying groceries, busing heavy dishes, scrubbing the bar counter and doing other tasks at her Spokane business, Broadway Bar and Grill, on multiple days. In addition, Racicot’s current and former employees and business associates told the investigator that she had been working at the restaurant for more than five years, and one employee said she had been doing so since at least 2001.

The charge alleges Racicot fraudulently received $249,267 in time-loss benefits for replacement of lost wages from March 2003 until August 2011. First-degree theft carries a maximum penalty of 10 years in prison plus a $20,000 fine and costs.

     In addition to the criminal penalty and fines, I expect that an overpayment order with fraud penalties was also issued under the workers’ compensation claim, although this was not mentioned in the bulletin.  The Department is able to issue an order claiming an overpayment of the benefits paid incorrectly PLUS a penalty of up to 50% of the overpaid amount.  The criteria for meeting the legal burden of proof in a fraud case is pretty tough, for good reason, but when fraud is proven the penalties can be quite severe.

     The description of this case sounds like the Department has a solid case against the claimant.  However, not all fraud cases are as clear-cut.  If you find yourself facing an overpayment order, with or without allegations of fraud, contact an attorney for possible assistance with the fight to come.

 

Photo credit: Flavia_FF / Foter / CC BY-NC-ND

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Private Investigators in Workers’ Compensation

Corporations sometimes hire private investigators to verify that your claim is not fraud

Today’s post comes from guest author Leonard Jernigan from The Jernigan Law Firm.

As a workers’ compensation attorney I find it interesting that many people in the public question the disability status of injured workers. Let’s assume for the moment that you have sustained an injury on the job and you’ve been out of work for 5 months after back surgery. When you are unable to return to work quickly, the insurance industry has a lot of tools at its disposal to verify your disability status. They can pour over your medical records, pre- and post-injury, looking for any piece of evidence to deny your claim. They can send your file to lawyers who review medical records and recorded statements to potentially attack your credibility and honesty. They can hire a nurse to attend your appointments and speak with the physician and the staff, as well as obtain information directly from you. They can do background searches on you to see if you have a criminal or civil record. Obviously they will check to see if you ever filed a workers’ compensation claim before. They will also do social media and Internet searches on you and your family members (Facebook, Twitter, LinkedIn, etc.). They also can hire private investigators to follow you and your family around and take video recordings of your activities. With all these resources at the disposal of the insurance company, it’s hard to believe that many cases of employee fraud slip through the system.

A private investigator pretended to be a potential buyer and spent an hour or more going through the house.

We have one client recently who was followed by several private detectives for more than a year. They not only followed him around, but also followed his wife and son, who have no workers’ compensation claim. Another client had to sell his house because of his disability. A private investigator pretended to be a potential buyer and spent an hour or more going through the house. Does the concept of “Big Brother” come to mind? Are you concerned about invasion of privacy, particularly for family members, friends, and others who may be seen in such videos? We always tell our clients such activity may occur so don’t be alarmed by it, but that isn’t too comforting to people who are struggling through health issues, who have depression and anxiety problems, and who are sensitive to privacy concerns.

It would be interesting if the roles were reversed and employers who underpay premiums by misclassifying the status of their employees, who fail to purchase insurance required to protect their workers, and who don’t follow proper safety regulations that cause injury, were followed this closely by employees or regulators who administer the workers’ compensation program. I have no doubt that these employers and insurance representatives would be outraged.

 

 

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14 Signs That Your Employer May Be Committing Workers’ Compensation Fraud

Is your employer committing fraud?

Today we have a guest post from our colleague Leonard Jernigan of North Carolina.

All employees should be on the lookout for signs that their employer or potential employer is engaging in workers’ compensation fraud.

The list of signs below was inspired by this one from the Washington State Department of Labor & Industries.

These signs may indicate that your employer is not paying workers’ compensation insurance for their employees. If they aren’t, this could put you in a very difficult situation if you are ever injured on the job.

If any of these signs sound familiar, report the employer to the Fraud Investigations Department of the Deparment of Labor and Industries and, if at all possible, find another job.

Your employer may be engaged in workers’ compensation fraud if:

  • They pay you in cash and don’t give you any kind of payroll stub.
  • They give you a 1099 form instead of the standard W-2.
  • They pay you other than in cash or check, by such things as free rent, reimbursement of expenses, barter, etc.
  • They pay you on a piecework basis and do not record hours.
  • They require you to work long hours but turn in fewer hours than you actually worked.
  • You or somebody you know is injured on the job, and the employer promises to pay the medical bills rather than reporting the accident to the North Carolina Industrial Commission.
  • The reported hours on an injured worker’s accident report do not match the hours the employer reported to the North Carolina Industrial Commission.  Continue reading
It's time to start talking about employer fraud.

Workers Beware Questionable (Fraudulent) Employer Tactics

It's time to start talking about employer fraud.

It’s time to start talking about employer fraud.

Over the course of 35 years representing injured workers, I have heard some whoppers – Employers’ questionable tactics that make even my jaw drop. With all the insurance company generated blather about “employee fraud” incidences of employer fraudulent tactics abound. Workers beware of the following:

  • Recorded statements taken by worker’s compensation carrier adjuster while employee is under medication or in the hospital still suffering from the injury. Questions such as “It’s true you had (low back pain, arm pain, fill in the blank pain, etc.) before your work injury, correct? You’ve had lots more pain from (your motor vehicle accident, sports injury, etc.) than you’re experiencing from your work injury, correct?
  • Employer “channeling” a work to its “Return to Work Clinic” (doctors on company payroll whose opinion is “like some athletic coaches, ‘rub some dirt on it and get back in the game’.”
  • Telling employees to take sick leave rather than claim worker’s compensation.
  • Telling employees to file medical bills under their group insurance, not worker’s comp.
  • Nurse Case Manager who initially befriends the employee but later makes every attempt with the worker’s doctor to prematurely return the worker to the job before a healing occurs.
  • Employer paying worker in cash with no payroll stub (or gives workers a Form 1099 rather than a W-2). Continue reading