A civil action instituted by LM Insurance Corporation was stayed against a defendant employer pending a Federal criminal action. The application to stay the Federal civil action was made by the employer to the court following the issuance of multiple Grand Jury Subpoenas and the execution of a Search and Seizure Warrant against the defendant employer in his home and place of business.
Showing posts with label employer fraud. Show all posts
Showing posts with label employer fraud. Show all posts
Wednesday, August 26, 2015
Friday, May 30, 2014
Intentional Fraud
All fraud is not actionable in workers' compensation. It is similar to discrimination action actions under the workers' compensation act. There is much talk, but few claims succeed, since they are based upon the element of intent.
This case caught my eye because of David DePaolo's recent blog post highlighting the recent, as David calls it, "Truly Imaginative" behavior of an individual playing two sides of the plot line.
The fraud issue struck a note for me as I have been reviewing cases for an upcoming seminar on workers' compensation issues. The decision of Bellino v Verizon, 2014 WL 10301786 (NJ App Div 2014) is a factual situation that seem to draw the ire of many insurance companies and employers. The injured worker failed to disclose some past medical information during a proceeding. The Court held that the element of intent was not proven.
Cases involving fraud are especially fact sensitive. Rarely does someone play both sides of the story line in perpetrating an intentional workers' compensation fraud scheme. Carlos Perry in West Virginia did so as the US Justice Department reports:
This case caught my eye because of David DePaolo's recent blog post highlighting the recent, as David calls it, "Truly Imaginative" behavior of an individual playing two sides of the plot line.
The fraud issue struck a note for me as I have been reviewing cases for an upcoming seminar on workers' compensation issues. The decision of Bellino v Verizon, 2014 WL 10301786 (NJ App Div 2014) is a factual situation that seem to draw the ire of many insurance companies and employers. The injured worker failed to disclose some past medical information during a proceeding. The Court held that the element of intent was not proven.
Cases involving fraud are especially fact sensitive. Rarely does someone play both sides of the story line in perpetrating an intentional workers' compensation fraud scheme. Carlos Perry in West Virginia did so as the US Justice Department reports:
Knoxville Man Sentenced To Twelve Years Imprisonment For Workers' Compensation Fraud
Carlos Perry Found to Have Defrauded Six Insurance Companies Out of $401,649 in Benefits
May 20, 2014
ABINGDON, VIRGINIA – United States Attorney Timothy J. Heaphy announced today that Carlos Perry, 58, Knoxville, Tenn. was sentenced last week in the United States District Court for the Western District of Virginia in Abingdon to twelve years in federal prison.
Perry was also ordered to pay restitution in the amount of $324,914.70. Perry had previously pleaded guilty to one count of mail fraud.
According to evidence presented at the sentencing and guilty plea hearings by Assistant United States Attorney Zachary T. Lee, between January 2011 and February 2014, Perry developed a scheme in which he defrauded six different insurance companies of workers’ compensation benefits using false business and fictitious employees. An investigation by the United States Secret Service determined that Perry’s scheme entailed Perry impersonating an owner of six fictitious businesses located in Wise, Va., Johnson City, Tenn., Bristol, Va., and Abingdon, Va., in order to obtain workers’ compensation insurance. Perry then filed false injury claims on behalf of the fictitious employees.
According to evidence presented at the sentencing and guilty plea hearings by Assistant United States Attorney Zachary T. Lee, between January 2011 and February 2014, Perry developed a scheme in which he defrauded six different insurance companies of workers’ compensation benefits using false business and fictitious employees. An investigation by the United States Secret Service determined that Perry’s scheme entailed Perry impersonating an owner of six fictitious businesses located in Wise, Va., Johnson City, Tenn., Bristol, Va., and Abingdon, Va., in order to obtain workers’ compensation insurance. Perry then filed false injury claims on behalf of the fictitious employees.
Perry received the checks sent by the insurance companies and impersonated the fictitious employees at doctor’s visits and in communications with the insurance companies. The United States Secret Service discovered that 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. On January 29, 2014, Perry was arrested by the United States Secret Service and the United States Marshals Service at a doctor’s office in Kingsport, Tenn., where he was impersonating one of the fictitious employees. As a result of Perry’s scheme, six separate insurance companies sustained a combined loss of $401,649.66.
The investigation of this case was conducted by United States Secret Service, United States Marshals Service, and the Virginia State Police. Assistant United States Attorney Zachary T. Lee is prosecuting the case for the United States.
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Tuesday, March 25, 2014
A Real Mess
Corporate fraud is a major problem in the workers' compensation system.Today's guest post authored by David Depaola is shared from http://daviddepaolo.blogspot.com and highlights a very serious problem with the nation'a workers' compensation system.
What do Oklahoma, New York, Washington, Kentucky and Florida have in common?
If it's workers' compensation, then the connection is a far reaching scheme involving millions of dollars, failed insurance companies and professional employer organizations. A federal grand jury in New York back in October 2012 indicted Wilbur Anthony Huff, principal behind a couple of professional employer organizations, Matthew Morris, Park Avenue Bank's former senior vice president, and Allen Reichman, the former director of investments at New York investment house Oppenheimer & Co. that Huff and Morris engaged with former bank president and Chief Executive Officer Charles Antonucci in an elaborate conspiracy to plunder Park Avenue Property and Casualty, formerly known as Providence Property and Casualty Insurance Co., and its subsidiary, Imperial Casualty and Indemnity, and artificially inflate the bank's assets to secure funding from the federal Troubled Asset Relief Program. U.S. Attorney Preet Bharara said in a press release that Huff, who secretly controlled South Florida PEOs O2HR and Certified HR Services, was at the "vortex of fraud" in a series of schemes involving more than $100... |
Read more about "corporate fraud" and workers' compensation:
Nov 03, 2011
"Fraudulent practices by publicly held corporations have contributed to the economic difficulties currently facing our nation," said OSHA Assistant Secretary Dr. David Michaels. "The best way to prevent this from happening in ...
Jul 12, 2012
Corporate Workers Compensation Fraud: California Targets Underground Economy. Sweep targets contractors operating in California's underground economy. Insurance Commissioner Dave Jones today announced that a ...
Jul 11, 2012
OSHA: Corporate Fraud Contributed To Nation's Economic Problems. The U.S. Department of Labor's Occupational Safety and Health Administration will publish interim final rules in the Nov. 3 Federal Register that revise the .
Monday, January 13, 2014
Spoliation of Evidence: Sanctions Reversed in Employer Fraud Case
Where an employer was unable to retrieve unfamiliar accounting records because his computer was “totally broke down,” and he tossed it out, a NJ Appellate Court overruled the Trial Court’s imposed discovery sanctions.
The case involved a claim brought by both, Liberty Mutual Insurance Company [LM] and the State of New Jersey [NJ], against an employer, and their accountant. At the employer’s request his acceptant allegedly maintained two sets of payroll records.
One set was the “big payroll roll,” [between $2 and $3 million], and the other set was labeled the “small payroll [$5000,000.]” The employer was charged with fraudulently paying premiums for workers’ compensation based upon the small payroll.
An audit by LM of the employer’s payroll records, initiated after an anonymous telephone call, revealed the discrepancy that eventually resulted in charges being brought by the NJ State Office of Insurance Fraud Prosecutor.
During the discovery phase of the case, the employer was unable to timely produce QuickBooks accounting records from his computer. The resulting discovery sanctions were imposed. They resulted in a cascading series of legal determinations resting in a judgment against the employer.
The Appellate Court held that the discovery sanction were too harsh. It reversed and remand the case for further proceedings.
Liberty Mutual Insurance Company v. Viking Industrial Security, Inc., 2014 WL 51615 (N.J. Super. A.D.) Decided January 9, 2014
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Jon L. Gelman of Wayne NJ is the author NJ Workers’ Compensation Law (West-Thompson) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thompson). For over 4 decades the Law Offices of Jon L Gelman 1.973.696.7900 jon@gelmans.com have been representing injured workers and their families who have suffered occupational accidents and illnesses.
Tuesday, August 13, 2013
Speedway owner accused of workers comp fraud
The Tioga County Sheriffs Office, in cooperation with the New York State Workers Compensation Board, charged a 37-year-old Rochester man Thursday with 26 felony counts of offering a false instrument for filing.
Jason M. Bonsignore, of Edgemere Drive, was also charged with four counts each of failure to secure compensation for employees and fraudulent practice, also felonies under the New York State Workers Compensation Law.
The charges are the result of an investigation of Bonsignores business, Champion Speedway on Old Narrows Road in the Town of Owego.
Bonsignore was arraigned in the Town of Owego Court in front of Justice John Schumacher and released on his own recognizance.
Anyone who has any information on potential workers compensation fraud violations can visit www.wcb.ny.gov or call toll free at (888) 363-6001.
[Click here to see the rest of this article]Jason M. Bonsignore, of Edgemere Drive, was also charged with four counts each of failure to secure compensation for employees and fraudulent practice, also felonies under the New York State Workers Compensation Law.
The charges are the result of an investigation of Bonsignores business, Champion Speedway on Old Narrows Road in the Town of Owego.
Bonsignore was arraigned in the Town of Owego Court in front of Justice John Schumacher and released on his own recognizance.
Anyone who has any information on potential workers compensation fraud violations can visit www.wcb.ny.gov or call toll free at (888) 363-6001.
Sunday, August 11, 2013
N.Y. AG announces $600,000 agreement with masonry contractor
Employer fraud continues to be a major problem. NY State has enforced workers' compensation laws actively. Today's post was shared by Legal Newsline and comes from legalnewsline.com
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| Eric Schneiderman |
New York Attorney General Eric Schneiderman announced Thursday an agreement with a masonry contractor and its owners for allegedly underpaying masonry workers on a publicly funded senior housing facility project.
Masonry Services Inc. and its owners, James Herrera and Jaime Herrera, allegedly paid masonry workers between $8 and $23 an hour for work on the St. Marks Project, far below the applicable prevailing wage rates.
MSI also allegedly failed to pay overtime to workers despite the workers regularly working more than 40 hours per week.
“My office will continue to pursue contractors who illegally underpay workers, whether it’s on a small scale or in a larger settlement like this one,” Schneiderman said in a statement. “Contractors who work on publicly-funded affordable housing projects must comply with all applicable laws, plain and simple. MSI will be held accountable for failing to meet its obligations to hard-working New Yorkers, in addition to paying back the wages owed to its workers.”
Monday, August 5, 2013
Illinois: Employer Convicted of a Felony for Failure to Have Workers' Compensation Insurance
The Illinois Worker’s Compensation (IWCC), in conjunction with the Cook County State’s Attorney’s Office Special Prosecutions Division and the Cook County Sheriff’s Office, has secured the first felony conviction for failure to secure workers’ compensation insurance.
Mr. Ahmed Ghosien, d/b/a Ghosien European Auto Werks, refused to comply with Illinois law despite having been given several opportunities to become compliant. After aggressive enforcement efforts, on July 25, 2013, Mr. Ghosien entered a guilty plea to the Class 4 felony (People v. Ahmed Ghosien, 12 CR 20949). This is the first felony conviction against an employer for failure to obtain workers’ compensation insurance since the penalty increase, from a misdemeanor to a Class 4 felony, was introduced in 2005 and remained a critical part of Gov. Quinn’s reforms to the Worker’s Compensation Act in 2011.
Mr. Ahmed Ghosien, d/b/a Ghosien European Auto Werks, refused to comply with Illinois law despite having been given several opportunities to become compliant. After aggressive enforcement efforts, on July 25, 2013, Mr. Ghosien entered a guilty plea to the Class 4 felony (People v. Ahmed Ghosien, 12 CR 20949). This is the first felony conviction against an employer for failure to obtain workers’ compensation insurance since the penalty increase, from a misdemeanor to a Class 4 felony, was introduced in 2005 and remained a critical part of Gov. Quinn’s reforms to the Worker’s Compensation Act in 2011.
Monday, May 13, 2013
The Attack on the Citadel: A Potential National Loss
Workers’ Compensation is conceptually changing, and its
extinction is becoming more apparent rather than its transformation. Over the
past decades, the “grand bargain” of Workers’ Compensation had evolved to ease the American industrial/manufacturing revolution forward, without burden from the economic complexities and
ramifications of the Civil Justice System.
“The Promise” made in 1911, with the adoption of the compensation system, is now past history. The demands
of the globalized marketplace have eroded the fortress of workers’ compensation that
protected the rights, safety and lives of American workers.
“The Promise” made in 1911, with the adoption of the compensation system, is now past history. The demands
of the globalized marketplace have eroded the fortress of workers’ compensation that
protected the rights, safety and lives of American workers.
Dynamic developments, occurring at an ever increasing pace, have altered
the landscape and accelerated a devastating attack on the citadel of
workers’ compensation. The root of the cause is economic.
Saturday, April 20, 2013
Employer Fraud: Safety Manager Conceals Employee Injuries for Bonus
On Apr. 11, 2013, Walter Cardin, 55, of Metairie, La., was sentenced to serve 78 months in prison followed by two years of supervised release, by the Honorable Curtis L. Collier, U.S. District Judge. Cardin was convicted at trial in November 2012, after being charged by a federal grand jury with eight counts of major fraud against the Tennessee Valley Authority (TVA), an agency of the United States.
The indictment and subsequent conviction of Cardin was the result of a six-year
The Shaw Group had a contract with TVA to provide maintenance and modifications to the three facilities and to provide construction for the Brown’s Ferry Unit Number 1 reactor restart. Cardin generated false injury rates which were used by the Shaw Group to collect safety bonuses of over $2.5 million from TVA. As part of a civil agreement filed with the United States in 2008, the Shaw Group paid back twice the amount of the ill-gotten safety bonuses.
Tuesday, October 16, 2012
NJ Company Pleads Guilty to Theft of Insurance Premiums
Techdan, LLC, which, at the time of the crime was located at 2092 Rt. 130 North in Florence, pleaded guilty yesterday to second-degree theft by deception before Superior Court Judge James W. Palmer, Jr. in Burlington County. The charge was contained in a July 3 state grand jury indictment.
Judge Palmer scheduled sentencing for November 16. Under the plea agreement, Techdan, LLC has agreed to pay $75,000 in restitution.
In pleading guilty, Techdan, LLC admitted that between March 12, 2004 and July 5, 2007, the company gave the false impression to Liberty Mutual Insurance Company that it was entitled to lower workers’ compensation premiums. Techdan, LLC admitted that it under-reporting the number of its employees and/or the misclassification of its employees’ occupational classes and/or under reporting the total employee payroll amounts to evade paying the full payment of workers’ compensation.
Deputy Attorney General Cheryl A. Maccaroni and Detective Natalie Brotherston and Civil Investigator Wilbert Sowney were assigned to the case. Acting Insurance Fraud Prosecutor Ronald Chillemi thanked Liberty Mutual Insurance Company for its assistance in the investigation.
Monday, October 24, 2011
Insurance Agent Charged With Theft of $255,000 of Work Comp Premiums
Attorney General Linda Kelly identified the defendant as Joseph A. Maurer, 58, of 2558 Welsh Road, Mohnton. Maurer owned and operated Commonwealth Professional Group, a former insurance agency located in Reading, Berks County.
According to the criminal complaint, Maurer is accused of taking more than $188,000 in premiums paid by four municipal governments, including Bally Borough and South Heidelberg Township, located in Berks County, along with Salisbury Township in Lehigh County and Earl Township in Lancaster County. The money allegedly paid to Maurer by all four municipalities was supposed to be forwarded to Pennprime Insurance Trust, of Harrisburg, as payment for workers compensation coverage.
Additionally, Maurer allegedly misdirected premium payments for at least five other policies purchased through his agency, totaling in excess of $67,000 that was supposed to be forwarded to Travelers Insurance and ACE American Insurance Company on behalf of various clients.
Maurer is charged with three counts of theft by failure to make required disposition of funds received, all third-degree felonies which are each punishable by up to seven years in prison and $15,000 fines.
Maurer was preliminarily arraigned on October 12th before Reading Magisterial District Judge Phyllis J. Kowalski and released on $850,000 unsecured bail. He was also ordered to surrender his passport.
A preliminary hearing for Maurer is scheduled for November 9th, at 1:30 p.m., before Magisterial District Judge Kowalski.
The case will be prosecuted in Berks County by Deputy Attorney General John T. Dickinson of the Pennsylvania Attorney General's Insurance Fraud Section.
Saturday, July 2, 2011
Injured Worker Sues Insurance Company for Malicious Prosecution
"In this proceeding we consider the appeal of AIG Domestic Claims, Inc. (AIGDC), from the denial of its motion for summary judgment. Jesse Maxwell, a workers' compensation claimant, brought suit against AIGDC regarding the company's conduct in referring his claim to the insurance fraud bureau (IFB), communicating with fraud investigators and prosecutors regarding his activity and claim, and using criminal processes to gain leverage in dealings with him. Maxwell sought recovery on theories of malicious prosecution, infliction of emotional distress, abuse of process, and violation of G.L. c. 93A and G.L. c. 176D. In July, 2007, AIGDC filed a special motion to dismiss the suit pursuant to G.L. c. 231, § 59H, the so-called “anti-SLAPP” statute. That motion was denied and AIGDC's appeal was unsuccessful. See Maxwell v. AIG Domestic Claims, Inc., 72 Mass.App.Ct. 685, 893 N.E.2d 791 (2008). On remand, the parties conducted discovery and AIGDC filed a motion for summary judgment in August, 2009. Summary judgment was denied. AIGDC appealed under the doctrine of present execution, and we granted its application for direct appellate review.
"We conclude that AIGDC enjoys qualified immunity regarding its reporting of potentially fraudulent activity but that summary judgment is inappropriate because all of Maxwell's claims rely, at least in part, on conduct falling outside the scope of the immunity. We also conclude that portions of Maxwell's claims may be barred by workers' compensation exclusivity under G.L. c. 152, but that not one of Maxwell's counts is barred entirely such that the Superior Court would be without subject matter jurisdiction. Accordingly, we affirm the order of the Superior Court denying summary judgment and remand the case for further proceedings consistent with this opinion.
For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900 jon@gelmans.com have been representing injured workers and their families who have suffered occupational accidents and illnesses.
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