Each week we'll be surveying what the media, state agencies, insurance companies, and others report in terms of workers' comp fraud. Just like a police blotter, our workers' comp fraud blotter lists recent arrests, charges, convictions and investigations.
Workers' Comp Fraud Blotter – July 11, 2013
If You Can’t Deliver the Mail, You Can’t Deliver the Pizza (CA) – Former U.S. Postal employee Tiong Ong has been sentenced to 90 days in jail, probation for 5 years, and $157,173 in restitution, after pleading guilty to filing a false worker’s compensation claim. Ong injured his back and sciatica nerve while working as a Postal Service tractor trailer operator and was awarded disability benefits. Although he maintained that he had no outside employment or income, he was first was employed as a general manager of a Domino’s Pizza Store. He then acquired a 51% interest in the corporation that owned the franchise for the store and was seen working as a delivery driver, order taker, and pizza maker. After that store was sold, he formed a new corporation in Hawaii, bought a Domino’s Pizza Store in Honolulu, and was seen opening and closing the store, talking on the phone, and delivering pizzas. Read more
Injured Postal Worker Required to Disclose Illegal Drug Income While Collecting Benefits (OH) – The United States Court of Appeals for the Sixth Circuit has affirmed the conviction of Nancy Hurley for fraud or making a false statement regarding receipt of federal employee benefits. While receiving federal workers’ compensation benefits for two work-related injuries from the U.S. Postal Service, Hurley failed to report $20,000 of income from an illegal prescription drug scheme involving Oxycontin, Methadone, Vicodin, and Xanax on her Form EN1032, which required her to report income from involvement in business enterprises. The Sixth Circuit held that Form EN1032 put an ordinary person on notice that she had to report income from illegal drug activities, by asking about involvement in or work for a business enterprise and about income from such enterprise. Read more
Cleaning Company Owner Arrested For Dodging Labor Laws Even After Settling Federal Claims (NY) – Jose Hector Hernandez Gramajo, the owner of Royal Commercial Cleaning, has been charged with failing to pay proper wages to workers he assigned to clean movie theaters, filing false applications for workers compensation insurance, and for filing false quarterly state tax returns to avoid paying unemployment insurance. Gramajp had previously paid back wages for overtime and minimum wage violations after an investigation by the United States Department of Labor. Read more
Former Elected Official’s Last Minute Claim of Spousal Abuse Forces Separate Trial From Co-Defendant Husband (ME) – A federal judge has severed the criminal trials of former Chelsea selectwoman Carole Swan and her husband Marshall Swan after Carole Swan indicated that she intended to use a defense of spousal abuse by Marshall Swan at the trial. Carole Swan will go to trial first on charges of Hobbs Act extortion, making false statements in federal income tax returns, making false statements to obtain worker's compensation benefits, and obtaining over $5,000 by fraud from a program receiving federal funds. Carole Swan is accused of seeking workers' compensation benefits while claiming that she could not clean her house or even blow dry her own hair by herself, while she was secretly working for her husband’s company, Marshall Swan Construction. Read more
State Supreme Court Agrees to Hear Appeal of Nightclub Owners Who Said They Didn’t Know the Law Before Customers and Employees Died In Fire (RI) – The Rhode Island Supreme Court has agreed to review a $1,066,000 workers’ compensation fine against Jeffrey Derderian and Michael Derderian, the formers owners of The Station nightclub that burned down, killing 100 people, including 4 employees, in 2003. The Derderian brothers, who had failed to carry workers' compensation insurance for three years at the time of the fire, claimed that they thought they were exempt from workers' compensation insurance because all of the nightclub employees were part-time employees. Read more
Tortilla Factory Owner Where Worker Died Heads To Jail On Workers’ Compensation Charge (NY) – Erasmo Ponce, the owner of Tortilleria Chinantla, Inc,, a corn tortilla manufacturer, has been sentenced to jail for 90 days and ordered to pay $450,000 in restitution, including $300,000 to cover a death benefit paid to the daughter of a worker killed at the factory in 2011. Juan Baten was killed when he fell into and was crushed by a waist-high dough mixing machine. Read more
For more information about LexisNexis products and solutions connect with us through our corporate site.