Tag Archives: employer fraud

Employee Workers’ Compensation Fraud? No – Employer Fraud Rampant.

Attorney Leonard Jernigan compiled a list of the biggest workers’ compensation frauds

Today’s post comes from guest author Thomas Domer, from The Domer Law Firm.

My friend and colleague Len Jernigan has again compiled the Top 10 Workers’ Compensation Fraud Cases for 2017.

 His results emphasize a theme that has been present for the last dozen years during which he has been compiling a “Top 10” list.  This year the Top 10 non-employee fraud cases resulted in fraud totaling just under $700 million.  Employee fraud cases resulted in zero fraud.  Seven of the Top 10 cases were from California, two from Texas, and one from Tennessee.

The cases involve health care fraud, where doctors prescribed inappropriate medications to pharmacies they operated, overbilling schemes for durable medical equipment, mail fraud, kickback schemes, referral of patients for unnecessary care, and prescribing unnecessary treatment.

A recurring theme, falsifying documents and under-reporting payroll to workers’ compensation insurance companies also appeared in the Top 10.  In one notorious case, the owners of a hotel hid the existence of 800 housekeeping and janitorial workers to avoid paying workers’ compensation insurance rates and payroll taxes.  The list also contains references to dishonest employers misclassifying more and more workers as independent contractors.  This misclassification is a fraud that wrongfully denies these employees workers’ compensation when injured, denies the government millions of dollars in payroll taxes to support Medicare, Social Security, Unemployment Compensation, and the fundamental rights of the workers.  Simply put, this misclassification is another employers shift the cost of accident and injury to the taxpayers and the fraud continues.

Workers’ Compensation Fraud – North Carolina Statistics for 2014 – 2015

Today’s post comes from guest author Kristina Brown Thompson, from The Jernigan Law Firm.

Several months ago, the North Carolina Industrial Commission published their Annual Report for 2014 – 2015. Based on the Annual Report, employer fraud was by far the overwhelming majority of investigated fraud in the North Carolina workers’ compensation system.

 

The Annual Report tracked investigations of suspected fraud and violations related to workers’ compensation involving employees, employers, insurers, health care providers, attorneys, and rehabilitation providers. The total figure of fraud investigations for 2014 – 2015 was 1,474 cases. Of those 1,474 cases, 1,336 cases related to employer fraud. That means that 90.64% of the investigated workers’ comp fraud was fraud on the part of the employer.  Whereas there were 129 cases of suspected employee fraud (i.e. 8.75% of the total investigated fraud cases).

 

The silver lining? Of the employer fraud that was prosecuted, the State of North Carolina was able to collect nearly $1,000,000 in revenue just in 2014 – 2015 in fraud penalties paid by noncompliant employers. 

Roofing Company Owner Faces Felony Charge for Not Paying Workers’ Comp

Today’s post comes from guest author Kit Case, from Causey Law Firm.

A Mason County, WA roofing contractor faces a criminal charge for allegedly failing to provide workers’ compensation insurance for his employees while they were on the job.

The Washington State Attorney General’s office has charged Peter Daniel Yeaman, 55, with unregistered contracting and doing business when his workers’ comp coverage was revoked.

The latter charge is a felony with a penalty of up to five years in prison and a $10,000 fine. Yeaman is scheduled for arraignment in Kitsap County Superior Court today, July 23.

The case resulted from a Department of Labor & Industries (L&I) investigation into Yeaman and his company, Southgate Roofing, of Belfair.

 

Unfair business advantage

“When contractors skip out on workers’ comp, it’s illegal and it’s incredibly unfair to legitimate contractors who pay their fair share and get underbid by these lawbreakers,” said Annette Taylor, deputy assistant director of L&I’s Fraud Prevention & Labor Standards. 

“Workers’ comp premiums for roofers are among the highest in building construction and the trades, based largely on the safety risks those workers face.”

State law requires employers to provide their employees with workers’ compensation insurance. The coverage provides medical care and other financial support if employees are injured on the job.

Construction contractors also must register with L&I. The department confirms they have liability insurance and a bond and that, if they employ workers, they’ve paid their workers’ comp premiums.

 

At least six roofing employees

L&I suspended Southgate Roofing’s contractor registration in November 2012 for failing to pay workers’ comp premiums, and later officially revoked the company’s workers’ comp coverage.

Nonetheless, according to the charges, L&I found two consumers in Silverdale who had work done by the company in May 2014 and in August 2014.

During the August job, six workers told an L&I inspector they worked for Southgate Roofing. Yeaman himself told the inspector he needed to pay a bill before he could register as a contractor, charging papers said.

 

Eight previous infractions

In addition, the charges say that between October 2013 and September 2014, the company bought roofing materials numerous times from a Bremerton supplier and made numerous trips to a Bremerton disposal site.

Apart from the criminal charges, L&I has cited Yeaman with six unregistered contracting and two permit-related infractions since 2013, and several safety violations in 2013. L&I currently lists him as ineligible to bid or work on public works projects. He owes the department more than $28,000 for the unpaid fines and more than $131,000 for unpaid workers’ comp premiums, penalties and interest.

Photo credit: davidwilson1949 / Foter / CC BY