Category Archives: Insurance

How It’s Going: Workers’ Compensation, Perspective and Resilience

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Man Jumping.previewWe humans are made of strong stuff. We can adapt, change, address a new situation, do the right thing, and sometimes even admit we’re wrong.

Though it’s hard to admit it, some of the challenges and stresses of the workers’ compensation system are that the system is made up of humans who lack perspective, lose perspective or refuse to see others’ perspectives.

One of the important and impressive things about humans is that we continue to adapt and gain perspective in situations that make us uncomfortable, doing the right thing even when facing big problems and challenges.

David DePaolo, CEO of WorkCompCentral

David DePaolo, CEO of WorkCompCentral

In Adjuster Does Right from David DePaolo, this amazing blog post helped me to step back and gain perspective.

Do you do the right thing when it might not be popular or profitable?

In his blog post, DePaolo writes the following, encouraging people to realize that those humans involved in the system might not have all the information but will be making a decision anyway, and stubbornly dig in because their way is the right one for their “side.”

“It’s easy to denigrate and criticize ‘the insurance company’ because of the monolithic facade of the establishment, and the cold, dehumanizing character of the process.

“But behind that steel and glass are real human beings entrenched in conflict as soon as they walk through the doors to do their jobs. Every day the professional at the claims desk has decisions to make that affect, deeply, others,” DePaolo writes.

In this case, DePaolo celebrates the result as a success story, because “Adjuster X did the right thing. Not without considerable anxiety, stress and internal conflict …”

The “sides” are not necessarily evil, and the people taking the sides are generally good people who have friends and loved ones.

fallowsJames Fallows wrote an article that is linked to at the end of the DePaolo story, How America Is Putting Itself Back Together. It has so many good thoughts and ideas in it, and I strongly encourage you to read it and think about how you are involved in whatever community, tribe, or cause outside of yourself in which you believe.

“What is true for this very hard-luck city prevails more generally: Many people are discouraged by what they hear and read about America, but the closer they are to the action at home, the better they like what they see,” Fallows writes.

For different people, “home” can mean different things. What is your community? Who are your people? Where do you belong, contribute, and make someone think and be challenged and/or feel good and be appreciated?

It doesn’t have to look the way your parents’ community looked – it can be online – uniting people in different states, or it can be via CB radios, to use a couple of examples that occur today.

Thinking about workers’ compensation makes me realize that the system can definitely be improved, but it does, generally speaking, work, as do a lot of other activities in American life, which Fallows demonstrates in his article in The Atlantic.

Sometimes people in workers’ compensation get so focused on their way or the highway – what Fallows likens to people on an Interstate who can only see the road ahead, because they’re driving on the ground.

But Fallows encourages people to get a different perspective – like he does – by flying low across the nation in a small plane. I think that idea can be applied to an individual’s situation, the workers’ compensation system, or a community, which was Fallows’ focus.

“I would love for more people to know how this country looks from above. I would love for America’s sense of itself to include more of what we’ve seen on the ground,” he writes.

There are smart, thoughtful people in every community. The workers’ compensation system is no exception. The quote below, though Fallon was referencing creativity in tech start-ups, applies to people who choose to be nice, make the best of hard and challenging situations, and strive to be kind.

“… Nearly everywhere we went we were surprised by evidence of a different flow: of people with first-rate talents and ambitions who decided that someplace other than the biggest cities offered the best overall opportunities. We saw and documented examples in South Carolina, and South Dakota, and Vermont, and the central valley of California, and central Oregon.” …

“Where you wouldn’t expect, that is, except we have seen so much of this nearly every place we’ve gone,” Fallows writes.

What Fallows is describing but doesn’t specifically name is resilience – recovering, adapting, developing coping tools, and figuring out the new normal. It is not an easy thing, but it is an important thing.

It is possible to be content – and even happy, or at least satisfied – with your personal situation, while still taking part in fighting injustice and inequity.

One way of doing that is by helping others – even working with people with whom you don’t agree philosophically – but who you can work with to improve a system or achieve a goal, anyway.

That’s one of the motivations of the Kids’ Chance of Nebraska organization. It offers scholarships to college students whose parents have been affected by workplace injury or even death. It is a wonderful, powerful cause, and I look forward to many more scholarships helping children of injured workers continue and ultimately reach their educational goals.

Though there is a lot of divisiveness and taking sides in the nation right now, after reading DePaolo and Fallows, it is reassuring to think that just like a bunch of small fragmented communities showing economic resilience, maybe our small gestures like a bunch of people within a workers’ compensation system giving Kids’ Chance scholarships, can and do make a difference to the greater whole.

Yes, there is always room for improvement. But I would like to think that just like that adjuster who did the right thing and those who give back to their communities are helping, that maybe we, as a nation, are doing OK after all.

The offices of Rehm, Bennett & Moore, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

This entry was posted in Insurance, workers compensation reform, Workers' Compensation and tagged , , , , .

‘Workers’ Comp Industrial Complex’ Cost-Containment Measures Harm Workers

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The National Workers' Compensation and Disability Conference & Expo in November featured a party with an acrobat, Hummer limos and a live alligator named Spike. Another workers' comp conference in August hosted a concert by Joan Jett & the Blackhearts. (Clockwise from top left: Michael Grabell/ProPublica, Artemis Emslie via Twitter, Tom Kerr via Twitter, Jamie Gassmann via Twitter)

The National Workers’ Compensation and Disability Conference & Expo in November featured a party with an acrobat, Hummer limos and a live alligator named Spike. Another workers’ comp conference in August hosted a concert by Joan Jett & the Blackhearts. (Clockwise from top left: Michael Grabell/ProPublica, Artemis Emslie via Twitter, Tom Kerr via Twitter, Jamie Gassmann via Twitter)

It is the beginning of a new legislative year in the United States. State legislatures will face the latest versions of “reforms” to workers’ compensation laws from business and insurance interests. They will renew their annual claims that the proposals benefit workers while coincidentally lowering or containing costs for employers and insurers. I wish these people would be honest about their real intentions. Cut the **** or to quote Monday Night Football: “COME ON MAN!”

A recent expose on the “workers’ comp industrial complex,” is a must read for all who care about injured workers and their rights. ProPulica author Michael Grabell describes the   “workers’ comp industrial complex” as a loose association of insurance and business groups and cost-containment companies, which are being bought and sold for billions of dollars in profits. Meanwhile, workers and their representatives fight endless legislative battles to prevent more benefits reductions and added obstacles to collecting those benefits. 

“… Over the past two decades, a cottage industry of middlemen has emerged, which some have dubbed the ‘workers’ comp industrial complex.’ Even private equity firms have bought in, seeing profit opportunities in employers’ and insurers’ quest to contain spending.

“The middlemen offer an array of services, from managing claims to negotiating medical bills, all promising to reduce costs — although critics say some actually raise them, as well as the burden on those hurt on the job.”

This ProPublica article shows the HUGE business opportunities some see in workers’ compensation. But these efforts will not help the injured worker, because cost containment means reduced benefits, stalling, denied claims, and working the system to delay, all at the expense of the injured worker and often his or her long-term health.

Respected workers’ compensation commentator David DePaolo, writes a column called “DePaolo’s Work Comp World” at workcompcentral.com, a website that bills itself as “Workers’ Compensation Education, Courses, News and Information.”

One of his recent articles, titled “Stop The Fantasy,” takes the notion of cost containment to task, and he also writes his views on the state of how “the media” cover workers’ compensation.

“Workers’ compensation should not be mysterious, should not be hiding, and should be exposed to the public good or bad, because it is for the public – each and every person that works in this country should be afforded reasonable work injury protection. It’s good social policy. It’s good economic policy.”

This focused quote from DePaolo’s commentary regards the “workers compensation industrial complex” that ProPublica took to task, where DePaolo really questions the need for and philosophy of this part of the workers’ compensation system.

“Cost containment is an apt term if we, as an industry, are willing to accept its definitional reality – that the intent of cost containment is to save money for those who are paying it out,” DePaolo wrote in his article.

“Let’s stop with the fantasy that cost containment is for the benefit of injured workers. It’s not. Otherwise it would be called something else. That cost containment paradoxically results in medical treatment that should cause better outcomes is not the paramount reason for these businesses.

“We all know that – so let’s stop trying to pretend that it is something which it is not.

“If the services are intended to benefit injured workers then there should be a better term for those services that should reflect that beneficial treatment,

“Maybe we’re misunderstood. Maybe our good intentions aren’t appreciated.

“But maybe cost containment really is an accurate term – and at whose expense?” 

Cost containment appears to be both big business and big money, from the extensive ProPublica article. Here are two paragraphs that explain the spoils that people could win or received at just one of the “more than 150 workers’ comp conferences a year.” 

“… For three days in November, hundreds of vendors wooed insurers and employers with lavish after-hours parties, giveaways of designer handbags, photos with Olympic gymnast Kerri Strug, and free rides in orange Hummer limousines. … Vendors gave away Apple watches, bottles of bourbon, and a Vespa scooter. There were free massages and shoeshines, a superhero caricature artist, more than one mentalist, and a live alligator named Spike.”

After all this excitement, the ProPublica article explains how much of workers’ compensation premiums that insurers in California spent on overhead – 36 percent – and how “the amount of money that insurers spend on medical cost containment programs has more than doubled from $197 million in 2005 to $471 million in 2014, according to the state workers’ comp ratings bureau.”

Some people involved in the fancy exposition included the following, quoted from ProPublica.

“There were companies that provide networks of doctors and companies that review medical bills, firms that provide expert medical opinions and firms that specialize in complex claims. There were defense lawyers, data processing firms, rehab facilities, surveillance companies, outside claims shops, occupational medicine clinics, pain management services, translators, schedulers, headhunters and associations promoting other conferences.

“There were labs that test injured workers’ urine for illegal drugs. There were even labs that test urine to ensure workers are taking the prescribed drugs instead of selling them.”

Now, because of the profit potential in “cost containment” (this is a phrase that should make people groan, as I did), “private equity firms have gone on a buying spree,” according to ProPublica, resulting in little-known players outside the workers’ compensation system becoming “powerful players in determining the future of how injured workers are treated.” 

“Increasingly, though, decisions to deny care aren’t being made by workers’ employers or insurers, but by these myriad claims administrators, managed care companies and cost-containment firms. Some industry observers say the firms have added a layer of cold bureaucracy to an already complicated system,” according to the ProPublica article.

I could provide more quotes and details from the articles, but as I wrote initially in this post, both the ProPublica and DePaolo’s articles are essential reading material for those who care about workers, how society treats workers, and who helps workers, especially when they’re injured. Because the system that’s supposed to help those who get hurt at work, workers’ compensation, is often bloated, confusing, and full of those (like folks working in cost containment) whose focus isn’t necessarily to either help injured workers heal, get back to work, or move on with their lives, but muddle the process instead.

We cannot match the resources of the “workers’ comp industrial complex,” but our cause to serve injured workers by getting them the prompt, quality medical treatment they need and deserve is just, and we must keep fighting the good fight!

The offices of Rehm, Bennett & Moore, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

This entry was posted in Insurance, insurance regulation, Money, Workers' Compensation, Workers' Compensation Reform and tagged , , , , , , .

Workers’ Compensation Basics: Choosing a Physician

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The series that examines the basics of workers’ compensation continues with this blog post.

In Nebraska, injured workers have a right to treat their work injuries with their own family doctor if that doctor has previously treated the worker, or an immediate family member, before the work injury. In other words, if a worker doesn’t have a family doctor, but his or her spouse, children, parents, or stepchildren have a doctor, the worker can see their doctor for his or her work injury as well. This is very important, because oftentimes, you can trust your family doctor to treat your work injury (and know your medical history) more than a doctor that your employer picks for you.

Not only may an injured worker elect to treat with his or her own family doctor for a work injury, but the injured worker may treat with any doctor if the employer does not provide the injured worker with a choice of physician form, or if the employer has denied payment of the work injury. In these situations, the chosen doctor is not limited only to the injured worker’s family doctor; it can be any or as many physicians as he or she chooses.

Many employers do not adequately inform their employees of their right to choose their own physician because they may want to steer an injured worker to a doctor who works for the employer. More specifically, a doctor recommended by an employer may be more likely to release a worker back to work too soon or not provide adequate treatment, in order to reduce costs for the employer.

In sum, you nearly always want to choose your own doctor for your work injury. You’ll likely get better, more personalized treatment from someone you trust, as opposed to the “company doctor.”

Read the previous blog posts in the workers’ compensation basics series by clicking on these links:

The offices of Rehm, Bennett & Moore, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

This entry was posted in Insurance, Workers' Compensation and tagged , , , .

$46 Million Stolen: 2013’s Top Ten Workers’ Compensation Fraud Cases

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Professor Leonard T. Jernigan Jr. has compiled a list of 2013’s Top 10 Workers’ Compensation Fraud Cases

Today’s post comes from guest author Leonard Jernigan from The Jernigan Law Firm in North Carolina. It is unfortunate that this article is necessary, but I appreciate the important work Mr. Jernigan does to compile these fraud cases each year. Because it makes for very interesting reading and reminds folks that fraud occurs on both sides of the workers’ compensation debate.

Employee fraud seems to get headlines, but employer fraud occurs on a much larger economic scale. As Mr. Jernigan points out, it’s the workers and taxpayers who are on the hook with employer fraud when an employee gets hurt and doesn’t have the coverage that they expected. But it is also worth noting that this year (for the first time in the five years Mr. Jernigan has compiled this list), an employee is in the top 10. As noted below, “the record is now 49-1 (employer fraud v. employee fraud) over the past five years.” I find this important food for thought as we begin a new year.

Employer Fraud Cases (9):$44,962,492.00
Employee Fraud Cases (1): $1,500,000.00
Total: $46,462,492.00

Every year we hear about fraud in Workers’ Compensation cases and the public believes the fraud is employee driven. However, in 2009 I began tracking the Top Ten Fraud Cases and 100% of the Top Ten between 2009-2012 involved employers or shady characters posing as legitimate businesses. The amount of employer fraud is staggering. In 2013 one employee fraud case did crack the Top Ten, so the record is now 49-1 (employer fraud v. employee fraud) over the past five years.

  1. Florida: Owners of Diaz Supermarkets in Miami-Dade are Accused of $35 Million Fraud (4/16/13)

    John Diaz

    John Diaz and his wife Mercedes Avila-Diaz owned and operated four supermarkets in the Miami-Dade area. They have been arrested and accused of workers’ compensation fraud and other fraudulent transactions totaling $35 million. One business they operated had no coverage for employees for ten years. They allegedly engaged in a scam to help subcontractors obtain false certificates of insurance that allowed the subs to work for general contractors who required the certificates.

  2. California: Hanford Farm Labor Contractor Convicted of Fraud in the Amount of $4,195,900 (12/6/2013)

    Richard Escamilla, Jr.

    Richard Escamilla, Jr. (47), owner of ROC Harvesting, misrepresented information to workers’ compensation insurance carriers by using new business names to obtain insurance and avoid providing a claim history. Escamilla pleaded guilty on October 29th and was sentenced to pay restitution of $4.1 million and serve six years in prison.

  3. Michigan: Insurance Executive Embezzled $2.6 Million from Workers’ Comp TPA (06/06/2013)

    Jerry Stage

    Jerry Stage (67), the former CEO of a non-profit workers’ compensation insurance company, and George Bauer (55), the bookkeeper, both pleaded guilty to embezzling from the Compensation Advisory Organization of Michigan (CAOM) for more than a decade. Mr. Stage embezzled $2.6 million from the company and conspired with Mr. Bauer to cover up the embezzlement.

  4. California: Employee Wasn’t Wheelchair Bound After All – Fraudulently Took $1.5 Million in Benefits (8/9/13)

    Yolandi Kohrumel

    Yolandi Kohrumel, 35, claimed for nine years that she was wheelchair bound after complications from toe surgery, but after she had collected $1.5 million in benefits it was revealed her claim was false. Her father, a South African native, was also engaged in the scam. Both pleaded guilty to insurance fraud, grand theft and perjury. Ms Kohrumel was sentenced to one year in jail, plus restitution.

  5. California: Father and Son Landscapers Accused of $1.45 Million in Insurance Fraud (5/7/13)

    Sunshine Landscaping

    Jesse Garcia Contreras (57) and Carlos Contreras (33), who operate a Thousand Palms landscaping business, are accused of committing $1.45 million in insurance fraud. They are accused of defrauding the California State Compensation Insurance Fund by misclassifying employees from January 2008 to March 2012. Mr. Jesse Contreras is the president and CEO of Sunshine Landscaping and his son is Director of Accounting. If convicted, they each face up to 19 years and 8 months in prison.

  6. Florida: Workers’ Compensation Check Cashing Operation Charged with $1 Million in Fraud (2/27/13)

    As a result of its investigation of I&T Financial Services, LLC, a company that was allegedly set up to execute a large scale check cashing scheme for the purpose of evading the cost of workers’ compensation coverage. Domenick Pucillo, the ringleader of the fraud scheme, was arrested and charged with filing a false and fraudulent document, forgery, uttering a forged instrument, and operating an unlicensed money service business. If convicted on all charges, he faces up to 45 years in prison. $1 million was seized during this investigation.

  7. California & North Carolina: Cleaning Company Owner Convicted of Underreporting Payroll and Ordered to Pay $898,000 (8/3/2013)

    L. D. Hardas, President of Awesome Products Inc., said support from the community and the state was key to bringing his company to Mount Airy.

    The president of Awesome Products, a cleaning company in California, was convicted and sentenced for underreporting his payroll by over $8 million, resulting in a premium loss of $898,000. Loksarang Dinkar Hardas (53) was sentenced to five years in state prison, stayed pending successful completion of 10 years of formal probation, a $250,000 fine, and restitution payment of $898,000. Notwithstanding his conviction, the town of Mount Airy, N.C was standing by Mr. Hardas and willing to give his company taxpayer money in hopes that Awesome Products would build a manufacturing facility and create jobs in Surry County, N.C.

  8. West Virginia: Coal Company Contractor in Mingo County Caught in $405,000 Scam to Avoid Workers’ Comp Premiums (11/6/13)

    Bank of Mingo

    Jerame Russell (50), an executive with Aracoma Contracting, LLC, a company that provided labor to coal companies on a contract basis, entered a guilty plea to a scam that involved funneling over $2 million through a local bank to pay employees in cash, thus avoiding payroll taxes and $405,000 in workers’ compensation premiums. Aracoma also bribed an insurance auditor to cover up its true payroll.

  9. Ohio: Roofing Business Owners Guilty of $283,592 in Workers’ Comp Fraud (7/30/2013)

    Frederick Diebert

    The owners of Triple Star Roofing were found guilty of fraud on July 15 for failing to report payroll to the Ohio Bureau or Workers’ Compensation(BWC). The company failed to report to the BWC from 2004 to 2008, resulting in under-reported premiums of $283,592.

  10. Florida: Owner of Staffing Company arrested for $130,000 in Workers’ Comp Fraud

    Preferred Staffing of America, Inc.

    The owner of Preferred Staffing of America, Inc., a temporary staffing agency in Tampa, has been arrested for allegedly running an organized workers’ compensation fraud scheme. Preferred Staffing’s owner misled clients into believing that his company was a licensed professional employer organization (PEO) and could provide workers’ compensation insurance coverage. Employers were reportedly charged more than $130,000 for workers’ compensation insurance and other services that were never provided.

For more information, contact: Leonard T. Jernigan, Jr. Adjunct Professor of Workers’ Compensation N.C. Central School of Law The Jernigan Law Firm 2626 Glenwood Avenue, Suite 330 Raleigh, North Carolina 27608 (919) 833-0299 ltj@jernlaw.com www.jernlaw.com @jernlaw

The offices of Rehm, Bennett & Moore, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

This entry was posted in employer fraud, fighting fraud, Insurance, Workers' Compensation and tagged , .

$97 Million In Fraud: 2012’s Top 10 Workers’ Compensation Fraud Cases

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CFO Jeff Atwater and Broward Sheriff Al Lamberti announced multiple arrests in Operation Dirty Money.

Today’s post comes from guest author Leonard Jernigan from The Jernigan Law Firm in North Carolina. It is unfortunate that this article is necessary, but I appreciate the important work Mr. Jernigan does to compile these fraud cases. It seems like the headlines frequently feature employee fraud, but employer fraud occurs, too, and sometimes on a much grander scale. As Mr. Jernigan points out, it’s the workers and taxpayers who are on the hook with employer fraud when an employee gets hurt and doesn’t have the coverage that they expected.

Over the past few years, many states have aggressively gone after workers’ compensation fraud (whether it’s the employee or the employer) and the amount of employer fraud being discovered continues to be staggering, notwithstanding these efforts. Legitimate business owners that pay for workers’ compensation, as required by law, are at a competitive disadvantage with those who cheat the system, and when people suffer a workplace disability and have no insurance local businesses that provide goods and services feel the pain along with health care providers who cannot get properly paid for their services. The cost of medical care and disability ends up being shifted to the taxpayer through Social Security, Medicare and Medicaid, and in states where compliance is not vigorously enforced a culture of cheating continues. The top ten cases for 2012 are listed below.

2012 TOP TEN WORKERS’ COMPENSATION FRAUD CASES Total Fraud: $97,466,500.00

1. ‘Operation Dirty Money,’ Stings Workers’ Comp Fraud Check Cashing Scheme

Florida: July 27, 2012

Multiple arrests were announced in Florida’s joint task force’s ‘Operation Dirty Money,’ which led to the arrest of alleged ringleader Hugo Rodriguez, owner of the Oto Group, Inc., and seven other individuals. Mr. Rodriguez was the facilitator of 10 known shell companies that funneled in excess of $70 million in undeclared and undetected payroll through different money service businesses. By using shell companies, Rodriguez was able to run a large construction operation and avoid paying the cost of workers’ compensation coverage, leaving employees at risk and scamming legitimate businesses.

 

2. Firms Face Charges for Skipping Workers’ Comp Payments

Ohio: May 13, 2012 Thousands of Ohio companies violated state law by not paying their most recent workers’ compensation premium, which can drive up insurance costs for businesses that follow the rules, a Dayton Daily News analysis found. The bureau identified about 41,247 private employers in the state that failed to report their payroll data and submit premium payments by the deadline. As of May, more than 12,200 accounts remain outstanding, and those companies owe an estimated $5.6 million in premiums.

3. Case Proves Employee Leasing too Good to be True

Texas: July 10, 2012

$4,466,500.00 was awarded in a Texas court against a staffing agency and its workers’ compensation insurance company. Jackson Brothers Hot Oil Service hired Business Staffing, Inc., (BSI) in 1999 and required BSI to have workers’ compensation insurance for its leased employees. BSI had 150 client companies with 2,000 employees. BSI bought a policy from Transglobal Indemnity for a total premium of $4,100.00 to cover all its employees. After failing to pay the medical bills of a 27-year-old oil field worker who was in an explosion and had 18 surgeries, the employee and Jackson Brothers sued BSI and Transglobal for fraud. Neither Transglobal (who had its corporate headquarters in the Turks and Caicos Islands) nor BSI had a license to conduct insurance business in Texas.

4. Business Owner Faces Insurance-fraud Charges

California: May 2, 2012


George Osumi was indicted on numerous felony counts.

Construction business owner George Osumi of Irvine, California was indicted on numerous felony counts of misrepresenting facts to the State Compensation Insurance Fund, among other charges. From December 2001 to March of 2006, Mr. Osumi committed workers’ compensation premium fraud by reporting his payroll to SCIF at just over $1 million, under-reporting over $3.5 million in payroll. This fraud resulted in a loss of over $814,000.00 in premium owed to the insurance fund.

5. Watertown Roofing Company and its Owners Plead Guilty and are Sentenced for Labor Violations

Massachusetts: January 11, 2012


Newton Contracting Company misclassified half of its workforce as subcontractors.

The Massachusetts Insurance Fraud Bureau discovered that the company, Newton Contracting Company, Inc., owned by Shaun Bryan and Antoinette Capurso-Bryan, misclassified half of its workforce as subcontractors, as well as failing to disclose to auditors more than $3.4 million of their company’s misclassified subcontractor payroll during its annual workers’ compensation audits.

6. 7-Year Sentence in $3.1 Million Fraud Case

California: November 30, 2012

Steven Morales, 65, of Wildomar, CA was convicted and sentenced to seven years in prison for his part in a $3.1 million workers’ compensation scheme. His son Brian was also convicted and sentenced to 4 years in prison. Morales and his son had set up a sophisticated system of shell companies to hide payroll and avoid paying workers’ compensation premiums.

7. Construction Company President Accused of Payroll Fraud

Florida: March 29, 2012

Randall Seltzer, president of Navarre Industries, Inc., was charged with multiple felony counts, including workers’ compensation fraud. An investigation by Florida’s Department of Financial Services’ Division of Insurance Fraud revealed that Seltzer systematically and intentionally under-reported his corporation’s true payroll to his insurance carrier. The department’s Division of Workers’ Compensation issued the company two stop-work orders within a five-year period. Seltzer allegedly established a shell corporation in 2011 to intentionally violate the stop-work orders and continue operating his construction business illegally. If convicted, Seltzer could face up to 30 years in prison and pay over $2.8 million in restitution.

8. CFO Jeff Atwater Announces Arrest of Owner of Fake Company for Creating Fraudulent Insurance Certificates and Avoiding Millions in Premiums

Florida: April 13, 2012


Yucet Batista allegedly used a shell company to commit large-scale fraud.

Yucet Batista was arrested for allegedly creating more than 250 fraudulent certificates of insurance to help uninsured contractors avoid $2.1 million in workers compensation premiums. Batista created the company and obtained the workers’ compensation insurance policy for the purpose of “renting” it, or making it available to dozens of uninsured subcontractors for a fee.

9. Audits Uncover Almost $1.2 million in Workers’ Compensation Violations at Boston Marriott Project

Massachusetts: September 4, 2012

In 12 audits conducted by the Joint Enforcement Task Force on the Underground Economy and Employee Misclassification and the Executive Office of Labor and Workforce Development, it was discovered that there were $584,249.00 in misclassified 1099 wages and $584,287 in unreported W-2 earnings, for a total of $1,171,536.00 in unreported wages by subcontractors on the Marriot renovation project. Six companies misclassified workers as contractors rather than employees, and seven companies failed to report wages. Among the worst of the offenders were one company that misclassified 28 workers and failed to report over $410,000.00 in wages; another failed to report $462,081 in W-2 wages.

10. Inn Owners Facing Workers’ Compensation and Insurance Fraud Charges

California: June 13, 2012


Owners of the historic Brookdale Inn and Spa are facing trial on charges of falsifying wage information to obtain lower insurance premiums.

The owners of historic Brookdale Inn and Spa, Sanjiv and Neelam Kakkar, are facing trial on charges that they falsified wage information to obtain lower insurance premiums. According to records, the couple paid approximately $800,000 less in insurance premiums than they should have over a period of several years.

The offices of Rehm, Bennett & Moore, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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Temporary Employees Cannot Be Excluded From Workers’ Compensation

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Today’s post comes from guest author Paul J. McAndrew, Jr. from Paul McAndrew Law Firm in Iowa. Most temporary employees are treated the same as any other employee in Nebraska, Iowa, and many other states. There are a few exceptions in Nebraska that include some but not all agricultural workers, for example. If you have questions about a workers’ compensation situation, feel free to contact a workers’ comp attorney to be advised about the details of your case.

According to a recent decision by the Texas Supreme Court, a temporary employee cannot be excluded from an employers’ workers’ compensation policy.

In 2005, Rafael Casados was killed on his third day at work at a grain storage facility owned by Port Elevator-Brownsville L.L.C. Because Casados was a temporary employee of Port Elevator at the time of his death, he was initially awarded a liability ruling of $2.7 million directly from Port Elevator. However, according to the latest Supreme Court ruling, Casados’s family should receive remedy under Port Elevator’s workers’ compensation policy instead. Port Elevator’s insurance provider is liable for Casados’s death benefits, despite the fact that Port Elevator never paid workers’ compensation insurance for any of their temporary employees.

According to the decision: “If Port Elevator’s policy had set out certain premiums solely for temporary workers and Port Elevator had not paid those premiums, Casados would still have been covered under the policy and the failure to pay premiums would be an issue between Port Elevator (their insurance provider).”

 

 

Photo Credit:sixninepixels / FreeDigitalPhotos.net

The offices of Rehm, Bennett & Moore, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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