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 4, 2013
Disabled Rural Mail Carrier Gets Five Months in Prison For Running Spa and Fitness Center and Giving Massages (MD) - Darlene Altvater has been sentenced to five months in prison by a federal judge after being found guilty of making false statements in order to obtain federal disability benefits. Altvater was employed by the U.S. Postal Service as a rural carrier, and after an on-the-job injury to her head and neck, she began receiving federal workers' compensation benefits. For six years, while she continued to receive workers' compensation benefits based on her disability, Altvater operated a salon, day spa and fitness center, performing physical acts such as demonstrating the use of the fitness equipment, performing pedicures, and giving massages. Read more
Trucking Company Owner Arrested for Resisting Arrest, Tax Evasion and Workers' Comp Violations (CA) - Bhagwant Singh has been charged with multiple counts of tax evasion, conducting business as an uninsured employer and resisting arrest. During the course of the investigation, it was revealed that Singh, who is the owner of A&J Shippers, Inc. and Los Angeles Express Trucking Companies, had failed to maintain workers' compensation insurance for his employees. Singh had also failed to pay State-required employee payroll taxes. Read more
Workers' Compensation Fine For Nightclub Fire Upheld (RI) - The Rhode Island Workers' Compensation Court has affirmed a fine of over $1,000,000 against Jeffrey Derderian and Michael Derderian, the formers owners of The Station nightclub that burned down, killing 100 people in 2003. Four employees were killed in the fire, and the owners had failed to carry workers' compensation insurance for three years at the time of the fire. Read more
Employees Who Claimed To Be Burned By Torch Accused of Actually Playing With Fire (OK) - Andrew Ozias, Joshua Duckworth, and Nathaniel McAlexander have been charged with workers' compensation fraud. All three allegedly misrepresented the facts and circumstances related to the cause of their workplace injuries during their depositions, in which they claimed that they were burned by a flash fire from a leaking gas torch while at work. A supervisor found no gas tank leak or sign of a fire or disturbance, and another person working near the three men that night didn't hear an explosion or see a fire. A supervisor found a soot covered lighter, a pressure tank that stored gas, balloon fragments, a burned plastic container and hollow golf balls outside near the company's northwest entrance. During an inspection of employee lockers, employers found fireworks, a golf ball with a fuse inside, balloons and several hollow golf balls in McAlexander's locker. Read more
Drywall Couple Ordered To Pay Over $200,000 For Fraud (WA) - Jaime Beroth and her husband, Lawrence Beroth, have been sentenced to jail and ordered to pay $224,000 in restitution, fines and other costs after pleading guilty to second degree theft. Both Beroths claimed that they were injured at work and could no longer work. But a tip to investigators caused the couple's drywall business to be secretly videotaped, where they were found to doing a variety of physical tasks. Read more
Framing Company Owners Charged With Harboring Undocumented Alien and No Workers Comp (KS) - James Humbert and his wife, Kimberly Humbert, and her brother Charles Stevens, the owners of Advantage Framing, have been charged with harboring and hiring undocumented workers for the purpose of lowering the company's operating costs. The wages the company paid did not include the employer's share of Social Security payments, workers compensation, or unemployment insurance benefits that were due. The company issued checks to crew leaders, who in turn cashed the checks and paid the undocumented workers in cash. Advantage Framing provided local builders and contractors with engineered floor, pre-built wall panels and roof truss systems, along with onsite framing erection labor. Read more
Chiropractor Charged With Workers' Compensation Fraud (OH) - Dr. Jeffrey Stychno has been charged with complicity counts of workers' compensation fraud, theft, and tampering with records. Stychno, a chiropractor, is alleged to have engaged in billing irregularities. Read more
Insurance Auditor and Business Owners Plead Guilty To Coal Mine Workers' Compensation Insurance Fraud (WV) - Arville W. Sargent, a workers' compensation insurance premium field auditor for BrickStreet Mutual Insurance Company, has pled guilty to mail fraud and tax evasion involving a multimillion-dollar fraud on his employer, the state's leading workers' compensation provider. Sargent 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 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 and drastically understate 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, pled guilty for 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 pled guilty to utilizing a significant cash payroll to evade payroll taxes. Likewise, Arthur White pled guilty to paying a portion of the payroll for T&W Services, LLC through a shell company, thereby evading taxes. Read more
State Department of Labor Issues Stop Work Orders To 27 Companies For Misclassification (CT) - The Connecticut Department of Labor's Division of Wage and Workplace Standards has issued Stop Work orders to 27 companies working at construction project sites. The Stop Work orders were levied against companies that misclassified workers as independent contractors with the intent of avoiding their obligations under federal and state employment laws covering such matters as workers' compensation, unemployment taxes and payroll reporting. Read more
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