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Workers' Comp Fraud Blotter – February 6, 2014
West Virginia Coal Mining Contracting Firm Sentenced In Federal Court For Currency Fraud Scheme (WV) – A federal district court has sentenced Aracoma Contracting LLC, which provided labor on a contract basis to coal companies in southern West Virginia, to probation for three years and ordered the firm to pay restitution of $4.7 million to workers’ compensation insurer BrickStreet Mutual Insurance Co. Aracoma and its principals, Jerome Eddie Russell and Frelin Workman, and Frelin’s son Randy Workman, as well as Backstreet auditor Arville Sargent, were previously sentenced to prison. Sargent engaged in a scheme to defraud BrickStreet by taking bribes to allow coal mining contracting companies controlled by Russell and Workman to drastically underreport their payroll during annual field audits he conducted on behalf of BrickStreet by allowing them to falsify documents and drastically understate their actual payroll. In exchange for saving Aracoma millions of dollars in insurance premiums rightfully owed to BrickStreet, Sargent accepted hundreds of thousands of dollars in cash bribes and other things of value, including a Yamaha Rhino all-terrain vehicle. Read more
Former Trucking Company Employee Sentenced to 8 1/2 Years in Prison for Workers’ Compensation Fraud of $45,000 (IL) – Elbert Rayford, Jr., a former employee of T.G. Gum Trucking, has received the longest prison sentence that has been imposed under the anti-fraud provisions of the Illinois Workers’ Compensation Act. Rayford misrepresented his medical condition and exaggerated his symptoms to doctors and physical therapists in order to remain off work, collect temporary total disability benefits, and receive medical care that was no longer necessary. Video surveillance showed Rayford engaged in activities that demonstrated his statements to medical providers were untrue. Read more
But Psychologist Who Stole $172,000 in Billing Fraud Scheme Sentenced to Only 12 Months Home Confinement (CA) – Dr. Arnold Nerenberg, a psychologist who overbilled the federal government with $172,754 in fraudulent workers’ compensation claims, has pled guilty to fraud and has been sentenced to 12 months of home confinement and electronic monitoring and five years' probation. Nerenberg claimed that he overbilled claims that were covered by the federal government because he also treated patients who could not pay his fees. Read more
Fired! Surveillance Catches Disabled Police Officer Working On Cars At His Auto Business (CT) – Middletown Police Officer Gino Pulvirenti has been fired for working while receiving workers’ compensation benefits for a knee injury. The city’s private investigator videotaped Pulvirenti working at his GP Auto Sales and Service, where he was observed lifting parts, loading pallets on a truck, and generally working on vehicles. Pulvirenti’s attorney claimed that Pulvirenti was using prescription narcotic pain medication that did not interfere with his automobile business, but prevented him from returning to work as a police officer. Read more
Disabled California Highway Patrol Officer Let His Dispatcher Wife Drive Whenever They Were Around CHP Headquarters (CA) – CHP Officer Daniel Clapp, and his wife, CHP dispatcher Jolea Clapp, have been charged with felony workers’ compensation fraud for lying about the extent of Daniel Clapp’s injuries. Daniel Clapp claimed that he was injured during a scuffle while making an arrest, and both he and Jolea told the workers’ compensation doctor that Daniel was unable to drive, lift heavy items, and that pain prevented him from performing his duties as a CHP officer. But Daniel was observed by CHP Internal Affairs to camp, boat, swim, dive, drive for long periods of time, and cut and carry firewood rounds 18” thick and 24” in diameter. Jolea often accompanied Daniel and would drive for him while in the local CHP jurisdiction and then change seats so that he could drive outside of the jurisdiction. Read more
Actress Fined For Allegedly Failing To Maintain Workers’ Compensation Insurance For Her Employees (NY) – The New York Workers’ Compensation Board ordered actress Uma Thurman to pay a fine of $72,000 for allegedly failing to provide workers’ compensation insurance for her employees. The Board found that Thurman failed to have insurance from December, 2011 to December, 2012. Read more
Contractor Receives One Year Jail Sentence After Second Conviction For No License and Insurance (CA) – As a result of his second conviction for operating without workers’ compensation insurance and fraudulent use of a contractor’s license, Lavaki Fale will serve 360 days in jail. Fale was operating Vei Construction and S&JR Construction and falsely told customers that he was licensed and insured, while his employees were not insured. Read more
Former Bus Driver Busted For Horseback Riding (NY) – Cynthia Marshall, a former bus driver for Greater Glens Falls Transit, has been charged with grand larceny and perjury. Marshall stopped working and began receiving workers’ compensation benefits after she had carpal tunnel surgery on both of her wrists. Although she testified at a workers’ compensation board hearing that she could not work because of the surgeries, she was videotaped by an investigator giving horseback lessons and performing other activities that showed that she had exaggerated her injuries. Read more
Paving Contractor Arrested For Scam Against Senior Citizens (WA) – Michael Eugene Sparrow has been charged with multiple counts of unregistered contracting, doing business without workers' compensation insurance, and false reporting by an employer. Sparrow went door to door and convinced senior citizens on fixed incomes that he could give them a really good deal for repaving and grading their driveways because he already had paving materials on his truck from another job. He then failed to complete the job after being paid or he charged the customers substantially more than his original quote. After complaints from eight customers, an investigation revealed that his contractor registration had expired in 1999 and that he did not have workers’ compensation insurance. Read more
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.
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