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 - April 26, 2012
Letter Carrier Collected Workers' Compensation Benefits While in Jail (NY) - Daniel Markel has pled guilty to defrauding the U.S. Postal Service and U.S. Department of Labor by making false statements and representations to obtain federal workers compensation benefits. Markel, a letter carrier, admitted that he falsely represented that he was not incarcerated during a period that he was collecting workers compensation benefits. While collecting the benefits, he was serving a four month sentence on a conviction for first-degree attempted dissemination of indecent material to a minor. Read more
Painting Company Underreported Payroll by Paying Under the Table in Cash (CA) - Bill Won Yi, the owner of BK Painting, has been charged with felony workers' compensation insurance premium fraud. He is accused of misrepresenting BK Painting's safety record and grossly underreporting its payroll by hiring unlicensed contractors and paying some employees' wages in cash, thus fraudulently lowering his insurance premiums by $200,000. Read more
Trash Hauler May Face Criminal and Civil Penalties For Failing To Provide Workers' Compensation (IA) - Hawkeye Waste Systems, a subsidiary of Watts Trucking that is operated by Jim Watts, is being investigated by the Iowa Attorney General's Office because it did not report a serious injury and failed to have workers' compensation insurance at the time of the injury. An employee fell eight feet while attempting to tie down a tarp on a roll-off trash container and was hospitalized and underwent surgery. The uninsured company was later ordered to pay disability benefits to the employee as well as a $25,000 fine. Read more
Unlicensed Contractors Snatched Up In CSLB Undercover Sting (CA) - A sting operation headed by the California Contractors State License Board's Statewide Investigative Fraud Team found 18 unlicensed contractors operating in South Pasadena. The sting targeted those suspected of violating state contractor license, labor, and employment laws. Investigators invited suspected unlicensed operators to submit bids for painting, flooring, drywall, and tree services at a home constructed in the 1920s. Three stop orders and citations for failure to carry workers' compensation insurance for employees were also issued. Read more
Arrest For Fraud Announced (FL) - Adolfo Campos has been arrested for workers compensation fraud. Read more
Public Employers Overcharged For Spinal Implants On Workers' Compensation Claims (CA) - Trudy Maurer, the CEO of Implantium, and Tigran Shahsuvarya have been charged with insurance fraud for allegedly overcharging city and county employers for the costs of spinal implants. The two men are accused of altering and inflating invoices for the surgery implant devices that Implantium sells. Read more
Firefighter Lied About Pre-Existing Medical Condition and Later Sought Compensation For Heart Attack (FL) - Former firefighter Jared Vega has been arrested on charges of grant theft for lying about his workers' compensation claim. Vega failed to inform his employer when he was hired that he had a protein deficiency, which would have disqualified him for employment as a firefighter. He later had an off-duty heart attack and filed a workers' compensation claim for the heart attack. Read more
Forensic Audit Used To Charge Roofing Company Owners With Insurance Fraud (CA) - John Applegate and Camille Applegate, the owners of Hallmark Roofing, Inc., have each been arrested on multiple counts of insurance fraud. The Applegate's are accused of failing to accurately report their employee wages to their workers' compensation insurance company, the State Compensation Insurance Fund. The California Department of Insurance conducted a forensic audit of the business, which revealed that by failing to report the business's employee wages accurately, Hallmark Roofing's owners avoided paying $629,391.10 in workers' compensation insurance. Read more
Electrical Contractor Paid In Cash and Lied About Number Of Employees To Lower Premiums (WA) - Harold E. Stone, owner of the Electric Company, has agreed to plead guilty to two counts of false reporting and to pay restitution in the amount of $17,762.78, which includes both workers' compensation premiums owed plus a penalty. Stone avoided paying workers' compensation premiums for years by paying workers in cash, failing to report some of his employees, and underreporting the hours worked of other employees. Read more
General Contractor Underreported Payroll For Company While Collecting Benefits As a Disabled Plumber (CA) - Jeong M. Baek, the owner of Baeks Brother Construction, Inc., has been charged with failing to pay the required worker's compensation premiums for his business while also double-dipping. Baek claimed to have suffered an injury while working as a plumber and was receiving disability benefits based on his plumbing job wages. While Baek claimed he was unable to work, he was caught on surveillance video operating his construction business, which included performing plumbing work. In addition, Baek obtained workers' compensation insurance for his construction business, but he fraudulently under-reported his employee payroll and misclassified employees in order to obtain a lower insurance premium. Read more
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