LexisNexis® CLE On-Demand features premium content from partners like American Law Institute Continuing Legal Education and Pozner & Dodd. Choose from a broad listing of topics suited for law firms, corporate legal departments, and government entities. Individual courses and subscriptions available.
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 - May 16, 2013
Husband Worked At Wife's Tanning Salon, Hang Tan, While Disabled (OH) - Bruno Sestito has pled guilty to workers' compensation fraud for working while receiving benefits. A tipster reported that Sestito worked at his wife's tanning salon, Hang Tan. A subsequent investigation found that Sestito participated in all aspects of the operation of Hang Tan, including opening the business, selling tans, providing receipts, assisting customers, receiving phone calls, writing checks, paying bills, operating equipment, cleaning and maintaining equipment, while collecting temporary total disability benefits. Read more
Owner of Historic Inn Pleads No Contest To Insurance Fraud (CA) - Sanjiv Kakkar, the owner of the Brookdale Inn and Spa, which in its heyday hosted celebrities such as Marilyn Monroe, has pled no contest to insurance fraud and will be sentenced in October. He failed to maintain his workers' compensation insurance and dissuaded an employee from filing a claim for a work-related injury. Charges against his wife, Neelam Kakkar, were dismissed as a part of the plea agreement. Read more
State Asks Court To Upheld Workers' Compensation Fine For Nightclub Fire (RI) - The Rhode Island Department of Labor and Training has asked the Rhode Island Supreme Court to uphold a $1,066,000 fine against Jeffrey Derderian and Michael Derderian, the formers owners of The Station nightclub that burned down, killing 100 people in 2003. Four employees were killed in the fire, and the owners had failed to carry workers' compensation insurance for three years at the time of the fire. Read more
Cable Installer To Pay Back Wages and Damages For Misclassification Of Employees As Independent Contractors (KY) - A consent judgment has been ordered in federal court requiring Bowlin Group LLC and Bowlin Services LLC to pay 196 employees a total of $1,075,000 in back wages and liquidated damages. The judgment resolves a Labor Department investigation conducted by the Wage and Hour Division that found that the defendants misclassified 77 employees as independent contractors and violated the Fair Labor Standards Act by denying those workers and others overtime compensation. Misclassified employees often are denied access to critical benefits and protections to which they are entitled, such as minimum wage and overtime, family and medical leave, and unemployment insurance. Misclassification of workers may also generate losses to the U.S. Treasury, and Social Security and Medicare funds, and to state unemployment insurance and worker compensation funds. Read more
Check In Databases For Social Security Number Finds Double-Dipping By Injured Worker ((WA) - Deana S. Cook faces charges on five counts of theft for fraudulently collecting more than $50,000 in workers' compensation benefits from the Washington State Department of Labor & Industries (L&I). Cook filed workers' compensation claims for injuries that occurred in 2007 and 2009. The claims were allowed and Cook received the benefits based on her contention that she was unable to work due to the injuries. A routine check of social security numbers between L&I and the Washington State Employment Security Department allegedly showed that Cook worked for two different employers during the time her L&I benefits were paid. Read more
Former CEO, Bookkeeper Charged With Embezzling $2.6 Million From Insurance Company (MI) - Jerry Stage, the former CEO of the Compensation Advisory Organization of Michigan (CAOM), has been charged with embezzling approximately $2.6 million from the company during an eleven-year period, working with CAOM bookkeeper, George Bauer, to cover up his tracks. Stage was employed as CEO of CAOM from 1993 until his retirement in July, 2012. It is alleged Stage paid Bauer to help him cut checks to himself, paying Bauer for his silence. CAOM is a non-profit corporation providing administrative and customer service support for the Michigan Workers' Compensation Placement Facility. It collects data from member insurers licensed to sell workers' compensation insurance in Michigan and is not associated with state government. Read more
Pizza Shop Allows Workers' Compensation Insurance To Lapse (OH) - Trista Blose, dba Bolivar Pizza, has pled no contest to workers' compensation fraud for allowing her coverage to lapse. Investigators interviewed Blose and confirmed that she did not have insurance. As a result of the investigation, Blose submitted outstanding payroll reports but failed to pay the premiums owed. Read more
Disabled Employee Received Narcotics From Two Doctors (OH) - Lawrence Blakeley has pled guilty to deception to obtain drugs and workers' compensation fraud. Blakeley deceptively obtained multiple narcotics from two physicians from January 2012 to September 2012. Blakeley admitted to agents that he did not disclose to either doctor that he received narcotics from the other doctor, as he was concerned the doctors would stop prescribing the narcotics. Read more
College Admissions Counselor In Indiana Received Ohio Disability Benefits On The Side (OH) - Montoan Butler has pled no contest to workers' compensation fraud for working while receiving benefits. A data cross match revealed an employer reported wages while Butler collected benefits for a workplace injury. An investigation found Butler worked as an admissions counselor at Earlham College in Indiana while receiving temporary total disability benefits. Read more
Woman Admits Forging Physician's Report But Denied She Did It For Fraudulent Reason (OH) - Julie Hiestand has been convicted of one felony count of forgery for altering documents to continue receiving workers' compensation benefits. An investigation found that Hiestand altered the ending date of her total disability period on a physician's report of work ability form and submitted it to her employer. Hiestand admitted to changing the date on the form. However, she denied doing it to secure additional benefits she was not entitled to receive. Read more
Welder Worked From Garage At Home While On Disability (OH) - Larry Duncan has pled guilty to workers' compensation fraud for working while receiving benefits. A source reported that Duncan had moved all of his welding equipment back into his garage from a warehouse that he had rented to do welding jobs. Investigators confirmed through bank records and customer interviews that Duncan was self-employed. He operated a welding business and performed paid welding services. Read more
Tow Truck Driver Reported Lower Wages In Order To Keep More Benefits (OH) - Danny McDonald has pled guilty to workers' compensation fraud and must pay restitution of more than $16,000. McDonald completed a rehabilitation program and began working as a tow truck driver. In order to obtain Living Maintenance Wage Loss benefits, he reported his bi-weekly earnings from his employer and he received the difference between his current earnings and his earnings prior to his industrial injury. McDonald began reporting earnings that were significantly less than his actual earnings, causing him to receive a higher benefit than he was entitled to receive. Read more
Truck Driver Caught By Commercial Vehicle Inspection While Receiving Disability (OH) - Dale Reed has pled guilty to workers' compensation fraud and has paid restitution in the amount of $9,042.43. A cross match report from the Public Utilities Commission of Ohio indicated Reed underwent a commercial vehicle inspection while operating a vehicle for Scheiderer Transport during the time period when he was receiving temporary total disability benefits. An investigation revealed that he knowingly worked as a commercial truck driver while concurrently collecting his disability benefits. Read more
Tow Truck Driver Took Call At Workers' Comp Office While On Disability (OH) - Rodger Jones has pled guilty to workers' compensation fraud for working while receiving benefits. A tip alleged that Jones worked as a tow truck driver while receiving compensation benefits. Through employment records and interviews, investigators found that Jones had returned to employment as a light service tow truck driver while receiving temporary total and living maintenance benefits. When investigators interviewed Jones, he admitted to responding to a vehicle service call at the Bureau of Workers' Compensation Garfield Heights Service Office while receiving compensation and thought he might be doing something wrong. Therefore, he quit working shortly afterward. Read more
Disabled Employee Worked As Pet Trainer (OH) - Cheryl Horvath has pled guilty to workers' compensation fraud for working while receiving benefits. Investigators identified Horvath as possibly working from a cross match with the Ohio Department of Jobs and Family Services. Employment records confirmed that Horvath worked as a Pet Training Associate/Clerk while receiving temporary total disability benefits. Read more
For more information about LexisNexis products and solutions connect with us through our corporate site.