Tag Archives: fraud

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Vancouver, WA Road Paver Charged with Unregistered Contracting

A Vancouver, WA man faces criminal charges that he operated as an unregistered contractor while paving driveways for Clark County residents. Some Clark County customers claimed his work was shoddy or never finished.

The Washington Attorney General’s Office has charged Salvador Rodriguez, 44, with six counts of unregistered contracting, a gross misdemeanor. He also faces two felonies − one count each of doing business without workers’ compensation insurance and failing to report or pay workers’ comp premiums. His business goes under the name Chava Paving.

The prosecution stems from a Department of Labor & Industries (L&I) investigation and multiple encounters between Rodriguez and L&I construction compliance inspectors.

 

Ridgefield consumer paid $33,000

The charges cover at least seven jobs Rodriguez’s company performed or agreed to perform from September 2012 through June 2014. In several of the jobs, consumers told L&I that Chava Paving did shoddy work or never finished, but Rodriguez refused to provide refunds or complete the jobs.

In one instance last June, a Ridgefield, WA property owner paid $33,000 in advance for the company to build a retaining wall and parking pad, and spread gravel on a road. The owner said that after five days on the job, the crew’s work was so poor and incomplete that he cancelled the contract. Rodriguez wouldn’t repay any of the money, which the property owner had paid in checks written to Salvador’s 17-year-old son, court documents said.

L&I recommends that consumers never pay contractors in full until the job is completed to their satisfaction.

Along with leaving unsatisfied customers, L&I found that Rodriguez wasn’t paying workers’ compensation for his employees. He employed three to 10 workers, depending on the job, without paying workers’ comp. In one case, at a Vancouver, WA mobile home park in July 2013, one worker even filed a wage complaint, contending that he was never paid; L&I retrieved the back pay for the employee.

 

Admits working without license

During an October 2013 interview with L&I staff, court documents said, Rodriguez admitted he and his workers were performing paving jobs without a contractor’s license or workers’ compensation account. He said he had to keep working to pay his bills.

Rodriguez originally registered Chava Paving in 2005. L&I suspended his contractor registration in May 2009 when his insurance and bond were cancelled, and revoked his workers’ comp coverage in October 2010 for failing to pay premiums. Since 2009, L&I inspectors have issued Rodriguez a dozen civil citations for unregistered contracting; none has been paid.

 

Check out prospective contractors

State law requires construction contractors to register with L&I. To register, contractors must have liability insurance, a business license and a bond to allow for some financial recourse if the project goes awry. Consumers can check whether a contractor is registered by going to www.Verify.Lni.wa.gov or calling 1-888-811-5974.

 

Photo credit: Steve Snodgrass / Foter / CC BY

Spokane Woman Charged with Defrauding State in $101,000 Disability Scam

SPOKANE — A Spokane woman stands accused of raking in more than $100,000 in disability benefits while working with her husband to operate his motel, and their nightclub and apartment building.

The Washington Attorney General’s Office has charged Mistie S. Crosby, 52, with one count of first-degree, felony theft. Crosby is slated to appear on the charge in Spokane County Superior Court on July 23.

The case resulted from a Washington State Department of Labor & Industries (L&I) investigation.

Crosby said she hurt her back, neck and shoulder in September 2010 while working at Sunset Junction, a nightclub in Spokane that has since closed. According to charging papers, she filed an injured workers’ claim, physicians confirmed she was injured, and L&I opened her claim.

No mention of ownership

When submitting the claim form, Crosby did not divulge if she was an owner, partner or corporate officer in the business where she was injured. Business owners must provide employees with workers’ compensation insurance, but the coverage is optional for the owners themselves. Crosby never signed up for the insurance.

From the time she was injured through early 2013, Crosby received nearly $59,000 in wage-replacement payments and more than $42,000 in medical and vocational benefits from L&I. During that period, she signed official forms certifying she was not working and incapable of working due to her on-the-job injury.

Undercover investigation

However, an L&I investigation revealed that Crosby was working at the Lascelle Motel and an apartment complex while she was receiving the workers’ comp benefits, charging papers said. At one point, she even showed apartments to an undercover investigator, and easily climbed stairs as the investigator watched.

In an interview in February 2013, Crosby told the investigator she co-owned the nightclub, motel and apartment complex, and played an integral role in each business, charging papers said.

L&I began the investigation based on a tip that Crosby was more active than she was reporting to L&I, and that she might be helping at the nightclub.

“We investigate every tip,” said Doric Olson, deputy assistant director of Fraud Prevention and Labor Standards. “Rooting out fraud allows us to protect the system for workers who are truly injured.”

To report cases of suspected fraud, go to Lni.wa.gov/Fraud or call 1-888-811-5974.

 

Photo credit: RoadTrippers.com

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Bad Time to be a Disability Lawyer

Today’s post comes from guest author Thomas Domer, from The Domer Law Firm.

I passed through Customs after a trip to Europe this week and explained to the Customs official that I represented injured workers.  His first comment to me was “How ‘bout those guys that are scamming the system?”  I attempted to provide the disclaimer to his notion that “At least one out of every three is a fraud.” by explaining that in a long term study of fraud in Wisconsin, the incidence of fraud was literally one in 5,000.

Nonetheless, that notion persists.  I read with interest today the speech of Professor Jon C. Dubin accepting a Distinguished Service Award.  I sent Professor Dubin a congratulatory note and obtained his permission to reprint it in an upcoming issue of the Workers First Watch (the magazine of the Workers Injury Law and Advocates Group (WILG) which I edit.  He noted

“Sometimes it seems like the only thing less popular than a disability benefit claimant these days is a disability benefit claimant with a lawyer. But it bears remembering that you are the first line of defense against these stereotypes and misperceptions and against the insidious drumbeat of atypical anecdotes and calls for draconian policy change. You are also the only ones who can communicate your clients’ true and heartbreaking counter-narratives to those fraud stories. You are the ones who can describe the terrible injustices that routinely occur in assembly line administrative decision-making especially when there is a cloud of political pressure lurking above that process.”

References made to Social Security representation are also applicable in our worker’s compensation arena.  Congratulations again to Professor Dubin on his well-deserved award and his accurate perceptions of disability claimants and their representatives.

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Stanwood, WA Business Owner Gets Prison Time in Nearly $300,000 Disability Fraud

A Stanwood, WA business owner must spend a year in prison for a scam that defrauded state and federal disability programs and his union, U.S. Attorney Jenny A. Durkan announced Thursday.

Richard Stalkfleet, 66, of Stanwood, collected more than $295,000 in disability and pension benefits for eight years while running a wood chip distribution company that earned more than a half-million dollars annually, according to a news release from the U.S. Attorney’s office in the Western District of Washington.

Washington State Department of Labor & Industries investigators played a major role in uncovering Stalkfleet’s activities. They conducted surveillance of Stalkfleet, and found him working and driving trucks while receiving Social Security Disability and Teamster Pension Plan benefits and more than $130,000 in L&I workers’ compensation benefits, according to federal prosecutors.

Read more about Stalkfleet’s sentence and the L&I investigation in the U.S. Attorney’s news release at  www.justice.gov/usao/waw/

 

Photo credit: ABN2 / Foter / Creative Commons Attribution 2.0 Generic (CC BY 2.0)

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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

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

Private Investigators in Workers’ Compensation

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

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