Former Corrections Officer Charged with Felony in $100,000 Workers’ Comp Scam

A former corrections officer stands accused of holding three security jobs while claiming his on-the-job injury was so serious he couldn’t work.

A Washington State Department of Labor & Industries (L&I) investigation caught John J. Gruden, 43, on video jogging on a treadmill and sidewalk, and driving to work at the Phoenix Police Department. All of this occurred while he was receiving workers’ compensation disability payments totaling more than $100,000 over five years.

Gruden, who was injured while working as a corrections officer at Monroe Correctional Complex, has been charged with felony first-degree theft based on his work activity.

Gruden is now believed to be living in Michigan.

The Washington Attorney General’s Office is prosecuting the case based on L&I’s investigation. The charge was filed in Snohomish County Superior Court.

Injures ankle at Monroe prison

Gruden injured his right ankle and foot when someone fell on him during training at the Monroe state prison in May 2011.

That August, he moved to Arizona, where he regularly declared on official forms and told L&I vocational counselors that he could not work, and wasn’t working, due to his on-the-job injury, charging papers said. His declarations, coupled with physician confirmations, allowed Gruden to receive L&I payments to replace part of his wages.

Surveillance to check injuries

In 2014, an L&I claim manager requested surveillance to check on the extent of Gruden’s abilities and injuries, and closely monitored his case. In 2015, the claim manager requested additional surveillance, which revealed Gruden was driving to a job.

L&I, with the help of an out-of-state investigation firm, determined Gruden had actually been working full time as a security professional for nearly the entire time he told L&I he wasn’t employed.


Police assistant for Phoenix Police

Starting in the fall of 2011, he worked for a private security firm for eight months, then as a public safety aide for Maricopa County Community College for two-and-a-half years. His annual salary at the community college was posted at more than $34,600, charging papers said.

While still working at the community college, he was a full-time police officer assistant/municipal security guard for the Phoenix Police Department from July 2014 until early 2016.

“Making false claims about your work status to get workers’ comp benefits is a crime,” said Elizabeth Smith, assistant director of L&I’s Fraud Prevention & Labor Standards. “Fraud raises costs for the employers and employees who depend on the workers’ comp system to help injured workers heal and return to work. Tell us if you know of someone who’s trying to cheat the system.”

Report fraud on L&I’s Fraud Prevention and Compliance webpage or call 888-811-5974.


Photo credit: Legozilla via / CC BY-NC-SA