Workers' Comp Fraud Blotter (2/21/2013) – Criminal Forgery and Fraud Charges Filed Against Restaurant Owners

Workers' Comp Fraud Blotter (2/21/2013) – Criminal Forgery and Fraud Charges Filed Against Restaurant Owners

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 21, 2013

Criminal Forgery and Fraud Charges Filed Against Restaurant Owners (CA) - Rhythm City Grill owners John Fletcher Johnson and Annette Lucille Thomas have each been charged with forgery of a workers compensation insurance policy and conducting business without workers' compensation insurance. An investigation at Rhythm City Grill that was initiated as a result of an anonymous complaint that the restaurant did not have workers' compensation insurance found that Johnson and Thomas failed to insure their 12 employees. Johnson had prepared a false paper and, with Thomas, forged an insurance certificate showing workers' compensation insurance that they did not have.   Read more

Demolition Company Owner Bombed Out With Altered Coverage Certificate (OH) - Chuck Longbrake, dba Longbrake Demolition, has pled guilty to workers' compensation fraud for altering his coverage certificate. Investigators received a tip from a client of Longbrake Demolition that claimed to have received a copy of a certificate from company owner Chuck Longbrake with questionable coverage dates. The certificate in question contained the name of a past administrator of the Bureau who did not hold the office during the coverage dates listed on the altered certificate. Longbrake's coverage had actually lapsed due to non-payment of premiums.   Read more

Knee and Back Injuries Did Not Prevent Husbands From Working For Their Wives (MA) - Paul Mahan, a former county corrections officer, and Kelly Walsh have been charged with fraudulently collecting disability benefits. While Mahan was receiving permanent disability benefits for a knee injury and Walsh was receiving disability benefits for a back injury, they were working regularly at Shamrock Motors, a business officially registered in the name of Mahan and Walsh's wives, performing a variety of tasks on and off site.  An investigation into the bank accounts associated with the business revealed numerous checks made payable to Mahan, Walsh and their wives totaling more than $385,000.   Read more

Tax Department Finds That Husband and Wife Failed To Maintain Workers' Comp Coverage (OH) - Randall and Linda Beach, DBA Beachy Cabinet Company, have pled guilty to charges related to their failure to maintain workers' compensation insurance coverage. An investigation was commenced after the Bureau received a referral from the Ohio Department of Taxation that Beachy Cabinet Company was operating without the required workers' compensation coverage. The employer fraud team attempted to work with the pair on multiple occasions to bring them into compliance. However, they still failed to make any payments or enter into a payment plan to reinstate their policy.   Read more

Owner of Janitorial and Pest Control Company Sentenced To One Year In Jail (CA) - Teresa Reif, the owner of Genesis Building Services, Inc., has been sentenced to jail and ordered to pay restitution of more than $2 million as a result of her guilty plea to workers' compensation fraud for underreporting the company's payroll to its workers' compensation insurance carrier. Reif reported less than half of her employees on her payroll forms to her insurers.   Read more

Business Owner Owes Over $126,000 For Lapsed Workers' Comp Coverage (OH) - Alan Fosnight, DBA Colonial Rubber, has pled guilty to a misdemeanor count of failure to comply for allowing his workers' compensation insurance policy to lapse. The Bureau's employer compliance department sent multiple compliance letters to Fosnight, and he acknowledged that he was operating a business in violation of state law requiring coverage, but he failed bring the business back into compliance. Fosnight was ordered to pay court costs and was given a 90 day suspended jail sentence with the stipulation he come into compliance within a reasonable amount of time. Prior to the plea deal, Fosnight paid approximately $9,900 towards his current balance of $126,283.21.   Read more

Roofing and Siding Company Owner Pleads Guilty to Charges of Workers' Compensation Fraud (MA) - James Lydon, the owner of James Lydon, Sons & Daughters, has pled guilty to charges that he failed to accurately report his total payroll, number of employees, and misclassified his business to avoid paying thousands of dollars in insurance premiums. Contrary to reports made to his insurance providers, Lydon employed at least four full-time employees between 2005 and 2009 and misclassified the work of his company during the same period.   Read more

70 Citations Issued As Result Of Statewide Sweep At Construction Jobsites (FL) - Florida investigators contacted more than 770 employers at 375 construction jobsites and issued 70 citations to construction companies and other businesses that failed to carry the required workers' compensation insurance. Stop Work Orders were issued for violations that included failure to obtain workers' compensation coverage as well as under-reporting payroll, such as paying employees in cash instead of payroll checks and misclassifying employees in order to receive a lower workers' compensation rate. During this sweep, five employers were found working in violation of already issued Stop Work Orders.   Read more

Double Dipping Leads to Fraud Charges (MA) - Medgine Dufrene has been charged with Workers' Compensation Fraud and Larceny Over $250. According to authorities Dufrene suffered a work related injury and began receiving temporary total disability benefits through her insurer in June 2011 and subsequently certified that she was not working. In January 2012, Dufrene's insurer learned that she was allegedly working for another employer while collecting benefits.   Read more

Disability Does Not Stop Bus Driver From Making His Routes (OH) - Bryan Primmer has pled guilty to workers' compensation fraud for working while receiving benefits. Primmer was found to be working as a school bus driver for Logan Schools while receiving temporary total disability compensation.   Read more 

Disabled Worker Received $4,000 In Benefits While Secretly Working On The Side (MA) - Michael McLaughlin has been charged with Workers' Compensation Fraud and Larceny Over $250. McLaughlin suffered a work related injury and began receiving temporary total disability benefits through his insurer and subsequently certified that he was not working. Authorities allege that McLaughlin fraudulently received more than $4,000 in temporary total disability benefits while continuing to work.   Read more

Temporary Total Disability Benefits Collected While Working Two Jobs (OH) - Jorge Banegas has been convicted of workers' compensation fraud for working while receiving benefits. A cross match with the Ohio Department of Job and Family Services determined that wages were reported to Jorge Banegas during the same time period that he was receiving temporary total disability benefits. Banegas later admitted to concurrently illegally working for two companies while receiving benefits.   Read more

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