Tag Archives: Workers’ Comp Fraud

Man ordered to repay $340K in workers’ comp scam

Renton man ordered to repay $340K in one of state’s largest workers’ comp scams.

The Washington State Department of Labor & Industries (DLI) announced the results of the prosecution of the injured worker on June 23rd.

The fraud case
Thurston County Superior Court Judge Chris Lanese ordered the Renton man to repay DLI more than $339,900. The judge also sentenced Mr. Strasbaugh to 45 days in electronic home monitoring.

Robert J. Strasbaugh, 67, who was receiving a workers’ compensation pension when he was caught, pleaded guilty to felony first-degree theft in the case. Mr. Strasbaugh was working as a delivery driver, using his wife’s name, while receiving total disability pension benefits.

Mr. Strasbaugh, who has already begun to pay back the state, fraudulently received nearly $342,000 in time loss, pension, and vocational benefits from 2012 to early 2017.

“Our investigation showed Mr. Strasbaugh was deliberately deceitful in his attempt to cheat the workers’ comp system,” said Chris Bowe, assistant director of DLI’s Fraud Prevention & Labor Standards division. “We truly appreciate the public’s help in tipping us off to cases like this.”

“Fraud is not a victimless crime. It hurts honest workers and employers who pay into the system and can cause their rates to rise.”

Anonymous tip
DLI began investigating Mr. Strasbaugh in 2017 after receiving an anonymous tip that he was working under his wife’s name, according to charging papers.

At the time, he was receiving DLI payments to replace part of his wages due to an on-the-job injury he suffered in 2003. A doctor had determined Mr. Strasbaugh could not work because of the knee injury and permanently disqualified him from returning to his job as a delivery driver.

Yet despite his official declarations to DLI that he was not working, a two-year investigation determined Mr. Strasbaugh had worked multiple delivery driver jobs around the state from May 2012 to January 2017.

Using wife’s name
Investigators determined Mr. Strasbaugh used his wife’s name and her Social Security number while working as a delivery driver for one company for about three years. The company owner said Mr. Strasbaugh’s work included loading and unloading freight.

The investigation also found he worked as a contracted driver under his own name for an apple delivery company. An auto rental business provided records showing that Mr. Strasbaugh rented delivery trucks 26 times over an 18-month period, each time signing his name and the company name.

DLI pension
Based largely on doctor assessments and claimant statements, Mr. Strasbaugh was found to be totally and permanently disabled in 2016. His wage-replacement payments ended, and he qualified to receive DLI pension payments for life, as long as he did not work.

DLI ended Mr. Strasbaugh’s pension in 2018 a result of the fraud investigation.

Worker Fraud Hurts Other Injured Workers

Statistically, most workers’ compensation fraud is promulgated by employers. Attempts to avoid paying premiums through mis-classification of workers, under-reporting hours worked, or labeling workers as independent contractors are common forms of employer fraud.

When an injured worker is found to have committed blatant fraud, as seems to be the case here with a man ordered to repay $340K, other injured workers are then also subject to suspicion of fraudulent activity. This leads to an undercurrent of disbelief in the administration of claims. Doctors may doubt the truthfulness of their patients. Claims Managers may suspect the worst of their claimants.

Going through the process of a workers’ compensation claim, from injury through medical treatment, return to work and claim closure, is already a difficult process. No injured worker needs the added scrutiny and, often, delays brought on by news of blatant claimant fraud.

Prior Posts on Related Topics

Wage Theft Claim Results in Fines for Evasion of Workers’ Comp Insurance

Employer who tried to skip out on paying workers’ comp must repay L&I nearly $12K 

The co-owner of a Mill Creek, WA housecleaning business has been ordered to pay the state more than $11,700 for trying to evade workers’ comp insurance bills.

Blake Joseph Standley, of Bothell, pleaded guilty last Thursday to third-degree theft and attempted false reporting, both gross misdemeanor offenses.

Snohomish County Superior Court Judge Richard Okrent sentenced Standley to 364 days in jail, but suspended all but 15 days, which were converted to community service.  Standley will face additional penalties if he commits a new crime or fails to follow restitution requirements in the next two years.

The Washington Attorney General’s Office prosecuted the case based on an investigation by the Washington State Department of Labor & Industries (L&I).

Charges are still pending against Monica Ann Covey-Standley, who was married to Blake at the time of the incidents, and ran their company’s daily operations. 

Paper trail, worker interviews

Standley filed reports to L&I in 2013 and 2014, claiming he had no employees in his housecleaning business, known as Kogaty Interiors.

However, an L&I investigation uncovered bank records showing the company was paying employees to clean houses during that time. Employees told investigators they worked for the company, and provided wage and tax statements, along with time sheets as proof.

According to charging papers, the couple should have paid nearly $12,000 in workers’ comp premiums.

Theft of wages

The theft charge stems from Standley’s failure to pay an employee for about two weeks’ worth of work cleaning houses in 2014. The worker told investigators that the couple ignored her emails and messages, and hung up whenever she called.

She filed a wage complaint to L&I, which determined the Standleys owed her about $1,000. Last week, Blake Standley paid the worker half of the wages, $515. Prosecutors will seek the remainder from Covey-Standley, who is scheduled to be tried on June 9.

Workers’ comp fraud raises costs

L&I administers the state workers’ comp system that provides medical and other services to help workers who are injured on the job heal and return to work. Employers and employees fund the system, and if some don’t pay, that raises rates for everyone else.

Report workers’ comp fraud at www.Lni.wa.gov/Fraud or call 1-888-811-5974.


Photo credit: janwillemsen via Foter.com / CC BY-NC-SA