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 11, 2013
Truck Driver Kept On Trucking When He Was Awarded Temporary Total Disability Benefits (OH) - James Lee has been adjudged guilty of continuing to work as a truck driver while receiving workers' compensation benefits for a prior workplace injury. He was ordered at sentencing to make restitution of $69,604.57 and was also ordered not to drive tractor-trailers. Investigators received a tip that Lee had worked since the time of his injury and drove a truck for three different businesses. Investigators found that Lee continued to be employed as a truck driver between 2006 and 2010 while receiving benefits. Read more
Truck Driver Caught By Commercial Vehicle Inspection While Receiving Disability (OH) - Ricky Davis has pled guilty to workers' compensation fraud and has been ordered to pay restitution in the amount of $57,533.14. A cross match report from the Public Utilities Commission of Ohio indicated Davis underwent a commercial vehicle inspection during the time period when he was receiving temporary total disability benefits. An investigation revealed that he knowingly worked as a commercial truck driver while concurrently collecting his disability benefits. Read more
State Agency Computer Cross-Match Catches Double-Dipping Truck Driver (OH) - Mark Wasko has pled guilty to workers' compensation fraud and must pay restitution in order to avoid six months in jail. Investigators received an allegation about Wasko from a state agency computer cross-match. Documented evidence supported the allegation that Wasko returned to work as a truck driver while receiving the temporary total disability benefits, and Wasko confessed to working while receiving the benefits. Read more
Security Firm Hired To Keep The Homeless Out Of Downtown Relied Upon Accountant For Legal Advice (CA) - Anthony Vincent, the owner of ESA International, has been charged with workers' compensation fraud and tax evasion. Vincent's firm was hired to provide security patrols for downtown Salinas, to reduce crime and deal with homeless persons in the downtown. Vincent has been charged with failing to carry workers' compensation insurance and failing to pay employer taxes. His attorney says that Vincent was advised by his accountant to classify his security guard employees as independent contractors. Read more
Business Owner Lied About Payroll To Lower Workers' Compensation Premiums (TX) - Harold Jenkins, the owner of CTJ Maintenance, Inc., has been indicted on workers' compensation fraud-related charges. Jenkins allegedly misrepresented the number of employees and payroll associated with his company when he obtained workers' compensation insurance coverage through Texas Mutual Insurance Company. Read more
Business Owner Must Have Thought That He Could Fool the District Attorney With One Month of Insurance (CA) - Najib Mohammad Samara has been charged with one misdemeanor count of conducting business as an uninsured employer. In January 2012, Samara was the subject of a criminal investigation, and as a result of the investigation, criminal charges were filed against Samara for failing to maintain workers' compensation insurance for his employees. In March 2012, Samara obtained the required insurance coverage for his employees. At his arraignment in June, he presented a copy of the new policy to the court and District Attorney's Office. Since Samara was now in compliance with California Law, charges were dismissed by the prosecutor. The following month, Samara's workers' compensation insurance policy was cancelled due to non-payment. Read more
Construction Employee Crossed State Lines To Double-Dip (MA) - Dennis Gabriel has been indicted on charges that he fraudulently collected more than $53,000 in workers' compensation benefits while working. Gabriel suffered a work related injury in August 2005 while employed on a construction site. In September 2007 the Department of Industrial Accidents ruled that Gabriel was eligible to receive temporary total disability benefits from his employer's insurance company, beginning in June 2007 through February 2009. In June 2008, the insurer received an anonymous tip that Gabriel was working as a subcontractor in Rhode Island while collecting workers' compensation benefits. Further investigation revealed that in July 2008 Gabriel signed Employee Earnings Reports stating that he did not receive any income while he was allegedly working as a subcontractor. Read more
Restaurant Owners Who Wanted College Students To Work For Free Are Indicted For Payroll Schemes (CA) - David Dadon and his son, Barry Dadon, the owners of the now closed State Street Grill, have been indicted on a total of 21 felony counts in an ongoing payroll scheme at their college area restaurant that allegedly violated minimum wage laws and California theft laws. Over a two-year period, the Dadons hired more than 20 servers and cooks, many of them college students, to work at the State Street Grill but refused to pay them after a week of work or offered them a wage that amounted to less than $5 per hour. The Dadons advertised on Craigslist for immediate placement of server and cook positions. They would offer the applicant the position if they agreed to work without pay for the first seven days. This was considered to be the "training period." Prosecutors believe that this is the first case in California where wages stolen from employees that were then not reported to the workers' compensation insurance company as payroll are being used as the basis to charge workers' compensation premium fraud. Read more
Insurance Agent Coded Roofing Companies As Paper Hangers To Lower Premiums (OK) - Insurance agent Fernando Espinoza has been charged with eight felonies for making false or misleading statements in insurance applications and obtaining money by false pretenses. Espinoza allegedly miscoded workers' compensation insurance policy applications so that roofing companies would appear as "paint and paper hanging" companies in order to obtain workers' compensation insurance. The insurance company doesn't issue workers' compensation policies to roofing companies and therefore, considers these policies to be invalid. In interviews with investigators, the roofing companies stated that they told Espinoza they were primarily roofing companies. Read more
Despite Prosecution's Objections, Judge Decides To Let Mom Stay Out Of Jail In Order To Take Care Of Her Kids (CA) - The trial judge who had sentenced Teresa Reif to a year in jail has removed the jail sentence and sentenced her to electronic home monitoring instead. Reif, the owner of Genesis Building Services, Inc., a janitorial and pest control company, had pled no contest to eight counts of workers' compensation fraud for underreporting the company's payroll to its workers' compensation insurance carrier by more than $10 million. Reif's defense attorney had sought the modification so that Reif could stay in her home and care for her three children, but the prosecution had objected to the change in the sentence. Reif must also pay restitution of more than $2 million. Read more
Counterfeit Workers' Compensation Insurance Leave Injured Workers Without Benefits (CA) - Robinson Yang, Roland Yang, and Sotheany "Teny" Hul have been arrested on multiple counts of theft, fraud and forgery for allegedly producing and selling hundreds of false certificates of insurance for workers' compensation insurance. The three suspects facilitated the theft by establishing three payroll service companies, Optima Staffing, United Employer Services (UES) and National Employer Services (NES), in the effort to provide a legitimate facade for their fraudulent scheme. Investigators discovered that Optima Staffing was defrauding its clients by producing and selling hundreds of false certificates of insurance, while both RJC Insurance Brokerage and Optima Staffing were allegedly selling forged certificates of insurance for workers' compensation insurance coverage. Read more
FBI Conducts Searches At Busy Workers' Comp Spinal Injury Hospital (CA) - The FBI and the IRS were issued search warrants that have been used to conduct searches at Pacific Hospital of Long Beach and Industrial Pharmacy Management LLC, companies operated by Michael Drobot. Pacific Hospital has performed more workers' compensation spinal fusion surgeries than any other hospital in California over the last decade. The affidavits for the search warrants have been sealed. Read more
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