Workers' Comp Fraud Blotter (2/14/2013) – Insurance Auditor and Others Charged With Coal Mine Workers’ Comp Insurance Fraud Scheme

Workers' Comp Fraud Blotter (2/14/2013) – Insurance Auditor and Others Charged With Coal Mine Workers’ Comp Insurance Fraud Scheme

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 - February 14, 2013

Insurance Premium Field Auditor and Others Charged With Coal Mine Workers' Compensation Insurance Fraud Scheme (WV) - Arville W. Sargent, a workers' compensation insurance premium field auditor employed by BrickStreet Mutual Insurance Company, has been charged with a multimillion-dollar fraud on his employer, the state's leading workers' compensation provider. Sargent is alleged to have engaged in a scheme to defraud BrickStreet by allowing certain policyholders operating in the coal mining industry to drastically underreport their payroll during annual field audits he conducted on behalf of BrickStreet for the intended purpose of confirming those policyholders were paying accurate workers' compensation insurance premiums. Sargent purportedly allowed four "employee leasing" companies, Aracoma Contracting, LLC, Christian Contracting, Newhall Contracting and T&W Services, LLC, all of whom provided labor on a contract basis to coal companies in southern West Virginia, to falsify documents drastically understating their actual payroll.  In exchange for saving those policyholders millions of dollars in insurance premiums rightfully owed to BrickStreeet, Sargent accepted hundreds of thousands of dollars in cash bribes and other things of value, including a Yamaha Rhino all-terrain vehicle. In addition to defrauding BrickStreet, the principals of Aracoma, Jerome Eddie Russell and Frelin Workman, admitted paying a significant number of their employees in cash as part of a tax evasion scheme to avoid the associated payroll taxes.  Randy Workman similarly utilized a significant cash payroll to evade payroll taxes.  Likewise, Arthur White paid a portion of the payroll for T&W Services, LLC through a shell company, thereby evading taxes.   Read more

Valentine's Day Romance: Husband and Wife Hung Drywall Together While Collecting Injury Benefits (WA) - Jaime Beroth and her husband, Lawrence Beroth, have pled guilty to second-degree theft for falsely claiming more than $223,000 in workers compensation benefits while continuing to run their drywall business. While they continued to work, Jaime Beroth claimed a shoulder injury and received more than $100,000 in benefits, and Lawrence Beroth received $123,094 in benefits tied to a claimed industrial injury.   Read more

Forgery Used To Extend Time Off Work Leads To Workers' Compensation Fraud Charge (AR) - Cindy Rose has been arrested on charges of forgery and workers' compensation fraud. Rose is accused of altering the dates on a Certificate to Return to Work/School in order to obtain workers' compensation benefits that she was not entitled to.   Read more

 Workers' Compensation Fraud Investigation Uncovers Identity Theft (CA) - Francisco Barajas has been charged with five felony counts of identity theft. During the course of an ongoing workers' compensation fraud investigation, investigators discovered that Barajas had utilized the personal information of an adult and a small child to obtain employment at a local business.   Read more

Father and Son Charged with Violating Farm Labor Contractor Licensing Law (ID) - An Idaho father, Angel Alba Sr., and his son, Angel Alba Jr., have been charged with violating the state's farm labor contractor licensing law after failing to pay two of their workers last year. It is alleged that the Albas failed to obtain the required state license, did not obtain a required farm labor contractor bond or workers' compensation insurance, nor did they pay state, federal or Social Security taxes on the wages involved in the claims by the two workers. The Albas were licensed to operate in Idaho in 2010 but have not been licensed since. A license costs $250 a year. Contractors are also required to insure vehicles used to transport workers, provide workers' compensation coverage for crews and pay a bond of $10,000 if they have fewer than 21 workers or $30,000 if they have more to cover unpaid wages. Angel Alba Sr. told an investigator he could not afford the $30,000 required bond.   Read more

Arrest Warrants Issued For Unlicensed Out Of State Contractors (ND) - Kevin Parkin, doing business as Mill Creek Construction and Minute Man Equipment, LLC., and Clint Peterson, doing business as C.R. Petersen, have been charged with unlicensed contracting after they both failed to respond to investigators' formal inquiries about their  contracting activity in North Dakota. An investigation was initiated after a fatal accident occurred when a water and sewer pipe trench caved in on a worker at a home construction job site where Parkin and Petersen were operating as contractors.   Read more

Construction Company Owner Pleads Guilty to Employer Workers' Compensation Fraud (MT) - Wayne Blomquist, the owner of 4M Construction, has pled guilty to employer misconduct for failing to accurately report and classify payroll information. This type of workers' compensation employer misconduct is illegal because the employer knowingly reports less payroll to save paying the full amount of workers' compensation premium he owes.   Read more

Sheriff's Office Employee and Husband Charged With Workers' Compensation Fraud (CA) - Keri Atwood, a civilian employee of the Ventura County Sheriff's Office, and her husband, Michael Atwood, have been charged with workers' compensation fraud and conspiracy. In addition, Keri Atwood also is charged with grand theft and burglary. Keri Atwood was placed on disability after she reported to her supervisors that she sustained an injury to her left ankle when another employee accidentally hit the back of her foot with a mail cart. She used crutches or a wheelchair to get to her medical appointments. After her appointments, though, she was seen walking freely and engaging in a number of physical activities that she told her treating physicians that she could not perform.   Read more

Attorney Who Employed Injured Worker Guilty Of Workers' Compensation Fraud (OH) - Attorney Natalie Grubb has pled guilty to fraud for employing an injured worker she was representing in a workers' compensation case. Investigators found that Grubb allowed an injured worker she was representing to work in her legal office as an assistant. The worker was injured as a truck driver and was receiving Temporary Total Disability benefits after obtaining the legal services of Grubb in the case.  The two conspired to hide the work activity and earnings so the benefits would continue.   Read more

Contractors Charged With Failing To Obtain Workers' Compensation Insurance (FL) - Quang Dinh, the owner of Gulf Coast Development Service, and Cristian Patasanu, the owner of Cristi Enterprise Inc., have both been arrested for failing to obtain workers' compensation insurance for employees at construction sites. In addition, William Gilmore was arrested for failing to obtain workers' compensation insurance for himself after he was found to be supervising a window installation.   Read more

Roofing Contractor Must Stay Home After Guilty Plea (WA) - David Erick Rau, doing business as Davey's Roofing, has been sentenced to 60 days in jail converted to electronic home monitoring after a state investigation showed that he failed to obtain workers' compensation benefits for his employees. Rau pled guilty to one count of Employer False Reporting, a Class C felony. After an employee was seriously injured, an investigation by the Washington State Department of Labor & Industries showed Rau failed to obtain workers' compensation benefits for his employees. He must also pay the $59,000 in back premiums and penalties for his unreported workers.   Read more

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