Workers' Comp Fraud Blotter (9/8/2011) – Operation Backbreaker Reveals Chiropractor Fraud

Workers' Comp Fraud Blotter (9/8/2011) – Operation Backbreaker Reveals Chiropractor Fraud

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 - September 8, 2011

Hauling Company Indicted for Payroll Misrepresentation (TX) - A grand jury indictment against Johnny Elroy Revia, Jr., Johnnie Mozelle Mundell, and Ramco Group., LLC, asserts workers’ compensation fraud in the form of intentionally misrepresenting Ramco’s payroll. The alleged malfeasance occurred between March 2006 and June 2007. Possible motives for this form of fraud include artificially low workers’ compensation insurance premiums. Read more

Concrete Proof of Fraud Prompted Restitution (TX) - Bar H Concrete owners Charles Rick Henderson and John Herbert Heilman entered guilty pleas in a trial that included accusations of workers’ compensation fraud. Specific claims included that Henderson and Heilman used a related company to conceal payments to Bar H employees. The judgment included an award of $300,000 to Texas Mutual Insurance Company, which provided Bar H workers’ compensation insurance coverage during the relevant period. Read more

Fast Food Manager Guilty of Unclean Hands (CA) – Jeannette Gallo pleaded no contest regarding a felony charge of insurance fraud related to a stress claim. Gallo, who was an assistant manager at a Jack in the Box, filed the claim after being present during a robbery at that restaurant. The evidence that Gallo had a role in the robbery included her arriving at work unduly early on the day of the robbery and engaging in other unusual behavior. Read more

Contractors Charged With not Obtaining Workers’ Compensation Coverage (CA) – The fruits of a crackdown by California’s Contractors State License Board (CSLB) on unlicensed general contractors included evidence that nine contractors did not obtain required workers’ compensation insurance coverage for their employees. The contractors who were accused of that workers’ compensation fraud received stop orders that required ceasing relevant activities. Read more

‘Operation Backbreaker’ Reveals Clinic Owner’s Fraud (OH) – A court has ordered that Back and Spine Center owner Bruce E. Holaday provide the Ohio Bureau of Workers’ Compensation (BWC) more than $200,000 in restitution, serve a 30-day jail sentence, and be under community control for his role in a workers’ compensation fraud scheme. An investigation dubbed “Operation Backbreaker” revealed fraud that included Holaday illegally using the names and provider identification numbers of chiropractors at his clinic to hide his roles in treating workers’ compensation patients after he was decertified as a BWC health-care provider and had been prohibited from seeing or receiving reimbursement from the BWC. Read more

‘Operation Backbreaker’ Nets Additional Chiropractors (OH) – The enforcement effort known as “Operation Backbreaker” that resulted in convicting the owner of the Back and Spine Clinic of felony workers’ compensation fraud also led to a similar conviction of four associates at that chiropractic treatment facility. One associate, Dr. Gary T. Berner, was sentenced to five years of community control and ordered to pay more than $110,000 in restitution and court costs. The investigation revealed evidence of illegal practices that included the clinic’s owner and his associates conspiring to conceal the owner’s role in treating workers’ compensation patients after the owner was decertified as a workers’ compensation health-care provider. Read more

Shell Corporation Used in Payroll Fraud (FL) – Braynert Marquez pleaded guilty to aiding and assisting in preparing and filing a false federal Employer’s Quarterly Tax Return for the last quarter of 2010. The charges related to issuing checks from accounts of Berma Block Corp. and Berma Group Corp. to a shell corporation to obtain cash that was used to pay some “Berma” employees. Marquez operated and had an ownership interest in the Berma businesses, which were construction companies. Marquez did not withhold, report, or pay over employment taxes on the “off the book” wages and did not report that compensation on federal quarterly employment tax returns. Read more

Contractor Conceals Nearly 10M in Wages (FL) – Richard Rosaire Routhier received a five-year prison sentence and was ordered to pay 1.2M in restitution after pleading guilty to a charge of conspiring to defraud the Internal Revenue Service. The offense related to a scheme to evade the duty to withhold and pay over employment taxes on wages to employees of Drymension, Inc., which was a drywall and framing company that Routhier owned and operated. Routhier’s role included having Drymension issue checks to shell corporations to provide cash for paying Drymension’s employees wages without withholding and paying over federal employment taxes. Read more

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