Workers' Comp Fraud Blotter (8/1/2013) – NCIS Helps Prove That Civilian Navy Employee Defrauded Navy and VA Out of $350,000

Workers' Comp Fraud Blotter (8/1/2013) – NCIS Helps Prove That Civilian Navy Employee Defrauded Navy and VA Out of $350,000

 

Workers' Comp Fraud Blotter – August 1, 2013

NCIS Helps Prove That Civilian Navy Employee Defrauded Navy and VA Out of $350,000 (CA) – Leray Shurn, a disabled civilian employee of the Navy, has been sentenced in federal court to 2 years in prison and ordered to pay $357,977 in restitution and a $5,000 fine for running a landscaping business while claiming worker’s compensation and unemployment benefits from the Department of the Navy (Navy) and Department of Veterans Affairs (VA). Shurn had claimed that he could not work and that he could not operate a business because of back and knee injuries. But the Naval Criminal Investigative Service (NCIS) and the VA produced evidence, including video recordings, of Shurn operating his landscaping business, performing landscaping work for customers, providing customers with his business card for “Leray’s Landscaping” as well as monthly invoices, and representing to landscaping suppliers that he was in the landscaping business.   Read more

Former Town Selectwoman Found Guilty of Seven Fraud and Tax Evasion Charges and Not Guilty on Three Charges (ME) – Former Chelsea selectwoman Carole Swan has been found guilty by a federal court jury on five counts of falsifying income tax returns and two counts of workers' compensation fraud. The jury found her not guilty of fraud in connection with a town culvert project that had been awarded to her husband’s construction company, Marshall Swan Construction, and not guilty on two other workers' compensation fraud charges. Carole Swan had sought workers' compensation benefits while claiming that she could not clean her house or even blow dry her own hair by herself, while she was secretly working for her husband’s company.   Read more

Disbarred Workers' Compensation Lawyer Does Not Pass Go! On His Way to the Federal Pen (GA) - Disbarred attorney Miles Lamar Gammage has been sentenced by the United States District Court for the Northern District of Georgia to five years and ten months in federal prison for mail fraud. Gammage stole workers' compensation settlement funds from more than 50 of his clients. Gammage settled many of the cases without the knowledge of his clients and forged their signatures on the settlement checks so that he could use the funds to pay the expenses of his office and for his personal use. When some clients insisted that he pay them, he made partial payments, telling the clients that the partial payments to them were advances and interest-free loans.   Read more

Former Postal Letter Carrier Convicted of Disability Fraud (AL) – Sean Slaton has been convicted by a federal court jury on eight counts of false statements in connection with the federal workers’ compensation program, 24 counts of wire fraud, and one count of theft of government property. Slaton was deemed disabled from a vehicle accident that occurred while he was working as a letter carrier. He later reported false information to the Postal Service and Department of Labor and misrepresented and concealed his physical abilities and limitations. During the course of the investigation, Slaton was observed engaging in physical activities that exceeded his prescribed medical restrictions.   Read more

Head Injury In Washington Leads To Secret Work In Idaho (WA) – Donna Childers-Adams has been charged with fraudulently receiving more than $12,000 in workers’ compensation benefits and nearly $4,000 for vocational rehabilitation by claiming she was unable to work. She filed a workers’ compensation claim in 2008 for a work-related head injury that she sustained in 1995. After she began receiving benefits in Washington, she allegedly went to work for a tannery in Idaho, although she told Washington authorities that she was not employed.   Read more

Roofing Company Misclassified Employees As Subcontractors To Avoid Premiums (OH) – Frederick Diebert and Michelle Scaggs, the owners of Triple Star Roofing, have been found guilty of workers’ compensation fraud for failing to report the company’s payroll in an attempt to avoid paying workers’ compensation insurance premiums. The company reported that it had no employees and only used subcontractors. The employees, though, were issued weekly paychecks, and two employees had filed successfully filed workers’ compensation claims that were not appealed by Diebert or Scaggs.   Read more

Four Double-Dippers Indicted In Texas (TX) – Mohammad Abid, Ernest U. Martinez, Michael J. Roberson, and Jose R. Valdez-Ramirez have been indicted by grand juries in separate cases on workers’ compensation fraud-related charges for unlawfully collecting benefits. In all four cases, the claimants reported job-related injuries and claimed that they were unable to work because of their injuries. Texas Mutual Insurance Company began paying workers’ compensation income benefits to them. Meanwhile, investigators uncovered evidence that the claimants were, in fact, gainfully employed and failed to notify the insurer of their return to work.   Read more

Phony Staffing Company Billed For Non-Existent Insurance and Services (FL) – Otto Biltres, Charles Brown, Kelly Brown, Johnny Lewis, and Joseph Jordan have been arrested for their participation in an organized scheme to defraud and operate without an insurance license. Otto Biltres, the owner of the temporary staffing agency Preferred Staffing of America, Inc., knowingly misled consumers into believing that his company was a licensed professional employer organization (PEO) and that it could perform PEO services such as providing workers’ compensation insurance coverage to client companies. Biltres charged client companies more than $130,000 for services and workers’ compensation insurance that was never provided. Charles Brown, a licensed insurance agent, referred companies to Preferred Staffing for a 45 percent commission and assisted Biltres with falsifying certificates of insurance. Brown’s wife, Kelly Brown, along with two unlicensed insurance agents, Joseph Jordan and Johnny Lewis, are accused of facilitating this organized scheme to defraud by steering client companies to Preferred Staffing for a commission fee.   Read more

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.

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