Workers' Comp Fraud Blotter (10/4/2012) – Father and Daughter Plead Guilty to Workers’ Compensation and Tax Fraud

Workers' Comp Fraud Blotter (10/4/2012) – Father and Daughter Plead Guilty to Workers’ Compensation and Tax 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 - October 4, 2012

Father and Daughter Plead Guilty to Workers' Compensation and Tax Fraud (CA) - Jerry Buffington, the owner and president of Safehome, Inc., and Cynthia Russell, the chief financial officer of the company, have been ordered to make restitution of over $600,000 and serve 10 years on probation. Safehome, Inc. was found to be underreporting its employee payroll in order to avoid paying the proper workers' compensation premiums, and it was found to be operating out of its classification, which was registered as an alarm company, although several of its employees were operating as roofers. During the investigation, a separate set of payroll records was located and corroborated the evidence that the business had not properly reported its payroll.   Read more

Rowdy Nightclub Shut Down For Lack of Workers' Compensation Insurance (NY) - Amnesia, a nightclub owned by Frank Sofia that has received neighborhood complaints for noise and parking violations, has been shut down by the New York State Worker's Compensation Board because it has operated for almost two years without workers' compensation insurance. The nightclub was investigated after an employee was injured on the job.   Read more

County EMS Employee Charged With Hiding Previous Neck Injury and Back Problems (OK) - Edith Jane Wilcoxson, a former employee of the Woodward County EMS, has been charged with workers' compensation fraud for failing to disclose her previous neck injury from an automobile accident and her previous diagnosis for degenerative disc disease. Wilcoxson filed a workers' compensation claim in 2007 for a 2006 injury while working Woodward County EMS, and she repeatedly testified in a deposition and two hearings that she did not have any neck or back problems prior to 2006.   Read more

Dismissal of Claimant's Action Against Ohio Bureau of Workers' Compensation Is Partially Reversed (OH) - The Ohio Court of Appeals has ruled that Pietro Cristino can proceed with his claims for fraud and unjust enrichment against the Ohio Bureau of Workers' Compensation. Cristino claims in his lawsuit that after receiving a biweekly lifetime award for permanent total disability, a representative of the Bureau convinced him to accept a lump-sum payment that did not represent the true present value of his lifetime award. The court upheld the dismissal of Cristino's claims for breach of contract and breach of a fiduciary duty.   Download the Court Opinion to Read More

Towing Company Keeps On Trucking Without Workers' Compensation Insurance (WA) - Sandra Rouse and Billie Rouse, the owners of A1 Towing, have been charged with operating a business without a certificate of workers' compensation insurance coverage. A1 Towing allegedly employed six tow truck drivers without paying any workers' compensation premiums for more than a full year after their certificate of coverage had been revoked for nonpayment of workers' compensation premiums.   Read more

Unlicensed Contractors Also Cited For Failing To Maintain Workers' Compensation Insurance (CA) - Five unlicensed contractors,  Todd Vincent Ferreira, Margaret Franco, Andrew James Reyburn, David Lee Fraser, Julio Cesar Flores, have been issued notices to appear in court for contracting without a license and have been issued stop work orders for not maintaining workers' compensation insurance. The contractors were nabbed in an undercover sting by an investigative team that used advertisements from local newspapers, craigslist, and internal referrals to schedule home improvement bids for painting, landscaping, concrete, and fence work.   Read more

Postal Contractor Guilty Of Workers' Comp Fraud and Theft (OH) - Albert Harr, a highway contractor for the United States Postal Service, has pled guilty to fraud and theft for collecting payments from the postal service to purchase required workers' compensation insurance coverage, but instead pocketing the checks. As part of his contract, the Postal Service reimbursed Harr for expenses, including workers' compensation costs.   Read more

Employer Pleads Guilty to Theft of Insurance Premiums Through Underreporting and Misclassification (NJ) - Techdan, LLC has pled guilty to second-degree theft by deception after an investigation that began with an anonymous tip. Techdan admitted that for over three years it gave the false impression to Liberty Mutual Insurance Company that it was entitled to lower workers' compensation premiums.  Techdan admitted that it underreported the number of its employees, misclassified its employees' occupational classes, and underreported the total employee payroll amounts to evade paying the full payment of workers' compensation insurance.   Read more

Billing Company to Pay $1 Million for Overcharging Local Governments for Prescription Drug Coverage (MA) - StoneRiver Pharmacy Solutions, a workers' compensation billing firm, has agreed to pay approximately $1 million in restitution for overcharging cities and towns in Massachusetts for prescription drugs under the workers' compensation insurance system. StoneRiver was ordered to pay the restitution under the Workers' Compensation False Claims Act and also agreed to put procedures in place to guard against future overcharges and implement a pricing protocol that was compliant with state laws and regulations.   Read more

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