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Thursday, November 12, 2015

NY Corporate Workers' Compensation Fraud Leads to Criminal Charges

New York State Inspector General Catherine Leahy Scott announced today the arrests of four Central New York and Southern Tier business owners on fraud and theft charges as part of an ongoing series of investigations into employers and employees who defraud the State Workers’ Compensation system. Under State law, employers are required to maintain Workers’ Compensation coverage for their employees, and employees are expected to provide truthful information regarding their work activity to insurance carriers and the Workers’ Compensation Board during the time they are receiving benefits.

Today’s arrests are part of an ongoing coordinated effort by Inspector General Leahy Scott with local and State law enforcement partners involving multiple investigations across New York. Additional arrests are expected imminently. It also coincides with enhanced outreach efforts, including stakeholder trainings by the Inspector General, to increase public awareness of Workers’ Compensation fraud in the State.

“The Workers’ Compensation system is meant to assist and protect employees who are unable to work due to an illness or injury, and those who abuse the system should fully expect they will be caught,” said Inspector General Leahy Scott. “In these arrests today, the defendants are accused of using fraud and deceit to undermine their legal and moral responsibilities, and I will use the resources of my office to relentlessly pursue anybody who abuses the system at the expense of honest, hard-working New Yorkers.” Workers’ Compensation fraud impacts all New Yorkers, from increased insurance premiums to increased workloads for coworkers and an overall reduction in workforce productivity.

Arrested today were:

Douglas S. Griffen, 53, of 330 Halseyville Road, Ithaca, owner of Fingerlakes Excavating LLC, was charged with Grand Larceny in the Third Degree and Falsifying Business Records in the First Degree, felonies, as well as the Workers’ Compensation crimes of Fraudulent Practices, a felony, and Failure to Secure Compensation, a misdemeanor. Inspector General Leahy Scott’s investigation found that Griffen, last summer, provided a Tompkins County home building company false documents that purported to show that his own company had valid Workers’ Compensation coverage in order to qualify for two construction contracts with the home builder worth $72,000. Griffin had no Workers’ Compensation coverage and would not have been awarded the contracts if he had not provided the false documents to the home builder. Griffen was arraigned in Ithaca City Court and sent to Tompkins County Jail in lieu of $5,000 cash or $10,000 bond bail and is due back in court Tuesday, Nov. 17.

 Roger Camby, 60, of 1119 Teall Avenue, Syracuse, owner of an online retail candle business, was charged with the Workers’ Compensation crime of Fraudulent Practices, Insurance Fraud in the Second Degree and Grand Larceny in the Second Degree, all felonies. Inspector General Leahy Scott’s investigation found that Camby, a former truck driver out from work on a Workers’ Compensation claim since 2010, was operating several businesses while certifying to the Workers’ Compensation Board that he was not working in any capacity. Between early 2011 and the summer of 2013 he received more than $56,000 in Workers’ Compensation benefits while also running a candle business, Lovesoy Candles and Gifts, as well as working as a consultant for three multi-level marketing businesses.

Camby was arraigned in Town of Tully Court and is due to appear in Syracuse City Court tomorrow, Nov. 13. John A. Francher, 73, of 20 Vista Street, Auburn, owner of the Greenbriar Home for Adults in Homer, was charged with the Workers’ Compensation crime of Effect of Failure to Secure Compensation, a felony.

Inspector General Leahy Scott’s investigation found that Francher operated a business with more than five employees without obtaining required Workers’ Compensation coverage. He employed approximately 10 people at the Greenbrier Home. Francher was previously convicted in February 2014 of a misdemeanor charge of failure to secure compensation at Briarcliff Manor in Bath. Francher was arraigned in Town of Homer Court and is due back in court next Tuesday, November 17.

Steven M. Spratley, 58, of 179 Prospect Ave, Walton, owner of Spratley and Sons Tree Surgeons, was charged with Fraudulent Practices, a felony under the Workers’ Compensation Law. Inspector General Leahy Scott’s investigation found that Spratley falsely denied at a 2013 Workers’ Compensation Board hearing that a man who was severely injured while working for him in 2011 was actually an employee.

The investigation found that Spratley made the false statements to avoid liability for the employee’s claim for Workers’ Compensation due to the injury, which made him unable to work. Spratley is due to appear in the Town of North Norwich Court at a future date. Inspector General Leahy Scott thanked the Workers’ Compensation Board, the State Insurance Fund, Liberty Mutual Insurance and the Ithaca Police Department for their assistance during the investigations; the Ithaca Police Department and the New York State Police for their assistance with making the arrests; and Onondaga County District Attorney William J. Fitzpatrick, Tompkins County District Attorney Gwen Wilkinson, Cortland County District Attorney Mark D. Suben and Chenango County District Attorney Joseph A. McBride and their offices for prosecuting these cases.

The defendants are presumed innocent until and unless proven guilty in a court of law.

For an audio file of Inspector General Leahy Scott’s remarks, click HERE