Workers' Comp Fraud Blotter (6/5/2014) – Fictitious Businesses and Identity Theft Used For $400,000 Workers’ Compensation Fraud Scheme

Workers' Comp Fraud Blotter (6/5/2014) – Fictitious Businesses and Identity Theft Used For $400,000 Workers’ Compensation Fraud Scheme


Workers' Comp Fraud Blotter – June 5, 2014

Fictitious Businesses and Identity Theft Used For $400,000 Workers’ Compensation Fraud Scheme (VA) – Carlos Perry, who ripped off workers’ compensation insurers for $401,649, has been sentenced to twelve years in federal prison for mail fraud. Perry developed a scheme in which he defrauded six different insurance companies of workers’ compensation benefits using false business and fictitious employees.  Perry impersonated the owners of six fictitious businesses located in Virginia and Tennessee in order to obtain workers’ compensation insurance.  He then filed false injury claims on behalf of the fictitious employees of these businesses and impersonated the fictitious employees at doctor’s visits and in communications with the insurance companies. Perry utilized nineteen fictitious identities in the course of his scheme and used the social security numbers of numerous real persons to execute his fraud.   Read more

Insurance Commissioner Sues Sand Blasting Company For Operating Without Worker’s Compensation Insurance (WV) – The West Virginia Insurance Commissioner has sued Superior Steam Cleaning and Sand Blasting Inc. and its president, Douglas Humphrey, and vice-president, Lovey Humphrey, alleging that they have failed to maintain workers’ compensation insurance. The lawsuit seeks to stop the company from operating until it obtains insurance.   Read more

Lowe’s Denies Misclassifying Home Installers As Independent Contractors But Offers To Settle Claims (CA) – Although it strongly denies that it controlled the work of its home product installers, Lowe's Home Centers L.L.C. has agreed to pay a settlement of $6.5 million to installers who claimed that they were misclassified as independent contractors. The class action lawsuit, with Ronald Shephard, who installed garage doors for Lowe’s for fourteen years, as the named plaintiff, claimed that the installers were deprived of workers’ compensation coverage and fringe benefits because Lowe’s classified them as independent contractors instead of employees.   Read more

Registered Nurse Arrested For Workers’ Compensation Fraud (CA) – Kate Zimmerman, an RN at the Kern Medical Center, has been charged with three counts of workers’ compensation fraud for misrepresenting information.   Read more

Pull the Pork – Lack Of Workers’ Compensation Insurance Shutters BBQ Restaurant (NY) – Cody’s BBQ & Grill has closed as a result of a stop work order from the New York State Workers Compensation Board. The restaurant's workers’ compensation insurance was canceled last August, and the owners ignored penalty notices that were sent beginning in December.   Read more

His Not So Injured Hand May Lead To Hand Wringing While He Is In Jail (ME) – – Stephen Tucker Sr. will spend a year in jail as a result of a jury verdict of guilty to theft of more than $10,000 in workers’ compensation benefits. Tucker received benefits by claiming that he could not work due to an injury to his hand that he sustained while working at Brewer's Service Station. But while receiving benefits, Tucker opened his own small engine repair business, Littleton Service, and performed many physical tasks in connection with his business that were inconsistent with his disability claim.   Read more

Mail Clerk Filed False Claims For Mileage Reimbursement To Doctors and Drug Stores (CA) – Jackie Sebastian, a Postal Service mail processing clerk, is facing insurance fraud and grand theft charges for submitting false claims for mileage reimbursements associated with a fraudulent workers' compensation claim. Sebastian filed a total of 249 claims and received $13,990 for mileage reimbursement for transportation costs to and from her medical appointments, which allegedly were not associated with any legitimate medical or pharmacy visits.   Read more

Contractors At Construction Site For Grocery Store and Department Store Shut Down For Lack Of Insurance (CT) – The Connecticut Labor Department has issued stop work orders against three construction firms that were working at a retail center without workers’ compensation insurance. Alvin Quality Masonry LLC and Industrial Technical Services Inc. were working on a new Big Y supermarket building project at the center, and G&F Group LLC was doing carpentry work on the Kohl’s building being constructed at the center. G&F was also found to be misclassifying its employees as independent contractors.   Read more

Firearms Dealer Ordered To Repay Illegal Workers’ Compensation Benefits (OH) – Michael Madigan has been ordered to pay restitution of $14,801.78 for workers’ compensation benefits that he received while he operated a firearms business. Investigators reviewed the bank records of the firearms business, which showed sales of firearms and some checks written directly to Madigan. An audit report of the business indicated that Madigan was the primary person selling the firearms.   Read more

Residential Drywall Contractor Agrees To Pay Back Wages and Cease Improper Misclassification Of Employees (AZ) – Paul Johnson Drywall Inc. and the U.S. Department of Labor have reached an agreement in federal court to remedy past misclassifications of Paul Johnson Drywall employees as independent contractors and to insure that future misclassifications do not occur. Paul Johnson Drywall used Arizona Tract LLC., a construction labor contractor, to misclassify former Paul Johnson Drywall workers as member/owners instead of employees, which stripped them of basic worker protections afforded to employees, such as minimum wage, overtime, and workers’ compensation.   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