Workers' Comp Fraud Blotter (5/15/2014) – Mayor Of Bonnie and Clyde’s Ambush Town Who Failed To Pay Bills Headed To Prison

Workers' Comp Fraud Blotter (5/15/2014) – Mayor Of Bonnie and Clyde’s Ambush Town Who Failed To Pay Bills Headed To Prison


Workers' Comp Fraud Blotter – May 15, 2014

Mayor Of Bonnie and Clyde’s Ambush Town Who Failed To Pay Bills Headed To Prison (LA) – Former Gibsland Mayor Odell Key has been sentenced to prison after pleading guilty to malfeasance in office. A state legislative audit revealed that the financial records for the town of Gibsland, where Bonnie and Clyde were ambushed and killed, were missing and that the town owed $80,000 to the Internal Revenue Service. Key had failed to pay the town’s workers’ compensation insurance and liability insurance premiums as well.   Read more

Executives Of Home Renovation Firm Charged With Insurance Fraud (CA) – David Wolfe, the president of Three Frogs Inc., a business that buys and renovates homes, has been charged with failing to maintain workers’ compensation insurance and unemployment insurance fraud. Also charged are the firm’s chief operating officer, John Murphy, and its chief financial officer, Jonathan D. Cox. In addition, Wolfe faces charges for the death of an employee who was killed while trimming a eucalyptus tree at Wolfe’s home.   Read more

Psychologist Who Claimed To Treat Patient Seven Days a Week Headed To Federal Prison (TX) – Psychologist Michael Wolf will spend 36 months in prison after pleading guilty to health care fraud stemming from his treatment of disabled federal workers who had sustained on-the-job injuries or employment-related occupational illness. As part of his scheme, Wolf filed claims for payment of services that were never rendered and for services that were rendered in far less quantities than billed. For example, Wolf claimed that he provided therapy for one particular injured federal employee, from January 2008 through mid-2013, seven days a week, when in truth he would only provide it once or twice a week for 60 minutes.  He also falsely claimed that he provided therapy to this individual on holidays and on Sundays, and that on multiple days, he provided eight hours of therapy, per day, for this patient.   Read more

Businessmen Illegally Claimed They Were Exempt From Workers’ Comp Because They Had No Workers (CA) – Everado Nieto, the owner of the Evercleen carpet-cleaning business, has pled guilty to workers’ compensation fraud. After an employee was injured on the job, it was discovered that Evercleen had employees but no workers’ compensation insurance. Licensed contractor Guz Lazrovich has also pled guilty to similar charges. He had claimed that he was exempt from workers’ compensation insurance because he did not employee anyone, but investigators found otherwise.   Read more

Police Chief Under Investigation For Workers’ Compensation Fraud and Excessive Force (AR) – Daniel Sutterfield, the Police Chief for Bull Shoals, is under investigation for a workers’ compensation claim that he filed after an arrest he made in July 2013. The FBI has already charged him with deprivation of rights for the use of excessive force in that arrest.   Read more

Insurance Broker’s Gamble With Casino’s Insurance Premium Refund May Send Him To Prison (CA) – Insurance broker James William Riley faces 16 months in prison for multiple felony counts involving theft and embezzlement of over $172,000 from Casino Pauma. His client, Casino Pauma, was due a workers’ compensation insurance premium refund because of fluctuations in its number of employees. But Riley failed to send the refund to Casino Pauma and used the proceeds for himself.   Read more

Former Mayor Expected To Plead Guilty To Lying To FBI During Banking Investigation (WV) – Darrin McCormick is expected to plead guilty to making a materially false statement in a federal investigation of the Bank of Mingo, where he worked as a branch manager. McCormick was also the Mayor of Williamson, West Virginia, until he resigned the day before he was charged. Federal authorities were conducting an investigation into the activities of the bank and Aracoma Contracting, an employee leasing firm that worked with coal companies. Aracoma was withdrawing cash from the bank in amounts to avoid federal reporting requirements and using the cash to pay its payroll and to bribe an insurance auditor to reduce its workers’ compensation insurance premiums.   Read more

Double-Dipper Ordered To Pay Restitution If He Wants To Stay Out Of Jail (OH) – Steven Pernell has pled guilty to one count of misdemeanor workers’ compensation fraud. An internal cross-match of state data revealed that Pernell worked at two different jobs while receiving disability benefits. He was sentenced to serve six months in jail, which was suspended on the condition that he pay $4,755.74 in restitution and investigative costs.   Read more

Lack of Workers’ Compensation Insurance Results In Stop Work Orders For Two Subcontractors On Amazon Warehouse (CT) – The Connecticut Department of Labor has issued stop work orders against two firms that were providing construction work on a new 1.5 million square foot Amazon warehouse. Pinnacle Steel, a Tennessee steel erector firm, had 20 employees on the job site but did not have workers’ compensation insurance. Kehrer Brothers Roofing, an Illinois roofing firm, had 12 employees on the job site and also did not have insurance.   Read more

Lyme Disease Claimant Is Likely Ticked Off That She Got Caught Filing Fraudulent Claim  (CA) – Susette Boggs has been arrested on charges of workers' compensation fraud. Boggs worked for the Los Angeles County Department of Parks and Recreation for over 10 years at the Placerita Canyon Nature Center, handling a variety of animals, including owls, skunks, reptiles and opossums. She reported that she had been bitten by a tick that caused Lyme disease, and she claimed a multitude of symptoms prevented her from working and made her daily life miserable. An investigation revealed that she failed to be truthful and misrepresented her involvement in a band as a drummer/singer to her doctors, where she was able to maintain physically active lifestyle.   Read more

Federal Employees Charged With Workers’ Compensation Fraud For Physical Activities and Double-Dipping (NY) – Eleven federal employees have been arrested for defrauding the Department of Labor’s federal workers’ compensation benefits program by claiming to be injured or disabled so that they could claim benefits to which they were not entitled. In addition, some of the defendants failed to report income that they earned from other businesses that they were running while they were allegedly too disabled to return to their federal employment. The 11 defendants include 10 United States Postal Service employees and one employee of the U.S. Navy. The 11 defendants charged were Juanita Tolbert, Samuel Munoz, Shonta Holmes, Alice Baca, Faith Pinkney, Angel Corujo, Pedro Nunez, Ronald Werner, Lashonne Tuggles, Charles Walwyn and Jeannie Wigfall.   Read more

Carpenter Nailed For Working While Collecting Workers’ Compensation Benefits (OH) – William Mcie has been sentenced to three years of community control as a result of his guilty plea to felony workers’ compensation fraud. A confidential source reported that Mcie was working as a self-employed carpenter. Surveillance was conducted and Mcie’s customers and suppliers were interviewed, which revealed that he was working while receiving temporary total disability benefits.   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.

For more information about LexisNexis products and solutions connect with us through our corporate site