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Real or Fake? Workers' Compensation Fraud

Posted By Stacey Gunn, Wednesday, April 17, 2019


Security cameras in a company cafeteria recently captured a brazen attempt to fake a workers’ compensation injury. The video shows that the man dumped a cup of ice onto the floor, disposed of the cup and then laid down on the floor as though he slipped on the ice. Prosecutors have charged the man with insurance fraud and theft by deception.

In this case, the fraud was well documented. Most employers don’t have cameras in their lunch rooms or other areas of their workplaces. It can be difficult to prove someone has faked an injury in the workplace without cameras catching them in the act. But the consequences of undetected workers’ compensation fraud are enormous. Fraud is a costly financial burden to employers and taxpayers, and it interferes with providing benefits to the vast majority of injured workers with legitimate claims.

If an employer suspects an employee has attempted to create a fake injury or fraudulent claim, there are several steps to follow up on right away:

  • Identify and interview any witnesses to the injury.
  • Did you notice anything unusual in the area the injury occurred (items on the floor, wet floor, torn carpet)? If the injured worker is alleging they tripped on something, secure the evidence and take pictures of the site.
  • Was there anything unusual about the injured worker prior to the injury (limping or favoring any body parts)? It could indicate an attempt to reframe an existing non-occupational injury as a workers’ compensation claim.
  • Check to see if they are on social media and review for any physical activities.
  • Obtain an Insurance Services Office claims report to see if the injured worker has a history of claims.
  • Take several statements from the injured worker, and look for conflicting information.
  • Assign surveillance to determine whether the injured worker is participating in activities inconsistent with the reported injury or has taken alternative employment during the disability.

Dishonest doctors and lawyers

Faked injuries may also be an indication of fraud perpetrated by dishonest medical providers or attorneys who operate “claim mills.” These fraud schemes recruit workers to submit fraudulent claims, can generate millions of dollars of undeserved benefits and impact employer loss experience resulting in higher workers’ compensation premiums. It’s important that claimants understand that their participation in reporting fraudulent claims exposes them to prosecution and severe penalties.

The following are several red flags that could be indications of a faked workers’ compensation injury:

  • There are no witnesses to the injury. Was it unusual that the employee would be alone or out of place at the time the injury?
  • The injury occurs at the end of the day on a Friday or on a Monday morning. The worker may have sustained a non-occupational injury over the weekend.
  • The employee changes the story about what happened. Their statement to a treating doctor is different from what they reported to the emergency room or on the initial report of injury.
  • The worker has a history of previous claims. Someone who has received significant workers’ compensation payments previously may try to go to the same well again.
  • There’s a delay reporting the injury. If a worker reports an injury months after it allegedly occurred, it could indicate the possibility the claimant was recruited by a claims mill.
  • The worker is disgruntled, on disciplinary action, or involved in a labor dispute. Employees may use a workers’ compensation claim to retaliate against their employer, or delay termination.
  • The worker (or a medical provider) refuses certain diagnostic tests or imaging. Avoidance of examinations that could confirm the existence of the reported injury is a key fraud indicator.
  • The injured worker has significant financial problems. The claimant may be trying to find a way to gain additional funds through a fraudulent claim.
  • The injured worker is hard to reach during their disability. A worker who does not return phone calls or emails could be avoiding requests for additional information or could be employed elsewhere.
  • The worker refuses modified-duty work or other return-to-work protocols. It could be an attempt to prolong their disability and could be a tactic of unscrupulous medical providers to get additional money.

Employers who suspect a faked occupational injury or other workers’ compensation fraud or abuse should seek assistance from their insurer or claims administrator. Potentially fraudulent claims are referred to the Special Investigation Unit (SIU), and cases with enough evidence are sent to the District Attorney for prosecution.

Tags:  fraud  insurance  workers'comp 

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2018 Insurance Fraud Hall of Shame

Posted By Administration, Wednesday, December 12, 2018


Welcome to the Insurance Fraud Hall of Shame, home of America’s nine most-brazen insurance scammers of last year. The No-Class of 2018 proves insurance fraud is hardly a victimless crime.

We’re all victims, $80-billion worth. Honest Americans lose their lives. … Our identities are stolen … … Our bank accounts are drained … We’re given painful and disfiguring surgeries. … Families face stress and despair. … Scams drive up everyone’s premiums. Fraud fighters are hunting hard. Let’s turn the corner on insurance fraud together — one scammer at a time.

Firefighters crushed in alley as burning nail salon collapses

What desperate emotions flashed through firefighters Larry Leggio and John Mesh as the burning nail salon’s brick wall crashed down on them? Did they even have time? Flames shot through a nail salon that Thu Hong Nguyen set to steal a $40,000 insurance payout in Kansas City, Mo. Leggio and Mesh died, and two other fire fighters were grievously injured combating Nguyen’s arson fire. Ngueyen poured gallons of acetone and isopropyl alcohol into the stock room of her LN Nails and Spa. She lit the fire just before leaving work at 7 p.m. The fire quickly grew into a three-alarm inferno battled by 110 firefighters. It was the largest fire Kansas City had seen in years.People lived in 16 apartments above the Nguyen’s shop. Some needed rescuing. read full story

Fake whiplash injuries fuel $23-million rifling of auto insurers

Whiplash and greed were good to Felix Filenger. The South Florida man motored several Bentleys around town, lived in an oceanfront apartment and flashed a $64,000 gold watch. His wife had $80,000 worth of designer bags. Filenger and Andrew Rubinstein looted auto insurers for a handsome living. They stole an outsized $23 million by loading up on inflated whiplash treatments for crash victims who were perfectly fine, or barely felt a twinge in their back or neck. The duo’s crime ring rifled insurers in Florida for seven years. The inflated insurance payouts were yet another prime reason Florida drivers pay some of the the highest auto premiums in America. read full story

Filthy sober homes evict tenants, force addicts back into drugs

Yury Baumblit crammed people into grimy flophouses that worked much like sober homes. Addicts in rehab, mentally ill men and homeless drifters sought hope and safety. Baumblit inflicted misery. His homes were vermin-infested firetraps in Brooklyn, N.Y. Baumblit forced desperate residents back into booze and drugs so they’d keep needing drug treatment. Corrupt rehab firms then churned more inflated Medicaid bills for bogus drug testing and treatment. Many residents were bullied to get rehab — even if they weren’t addicts. Baumblit housed downtrodden people nobody else wanted. They needed the shelter to avoid dangerous homeless shelters and drug-infested streets. He imposed a sinister catch to stay in his homes: Attend drug treatment programs he chose — or be kicked back onto the streets. read full story

Mother poisons disabled infant for $50,000 of life insurance

Erica White inserted lust for insurance money where a mother’s heart and conscience should’ve dwelled. How else to explain poisoning her 15-week-old son Tyrael McFall to death for $50,000 of life-insurance money? Little Tyrael never had a chance at childhood. His father Joseph McFall threw him when he was just eight weeks old in the Atlanta area. The impact broke Tyrael’s wrists and a rib. He was permanently blinded, unable to walk and severely brain-damaged. White left McFall, though had little use for Tyrael. He just got in her way. She wanted to have fun and spend money with boyfriend Michael Schullerman, who she met on a dating site. read full story

Bribes for blood: Dozens of doctors paid off in $100-million theft

Prostitutes. Strip clubs. Cash. Luxury cars. Tickets to Katy Perry concerts. Private jet getaways. Dozens of doctors betrayed their oath of honest medicine by taking lavish bribes for blood samples in a $100-million insurance scandal run by David Nicoll. He masterminded the largest bribery scheme of doctors in U.S. history, all to steal insurance money in megadoses. Nicoll knew nothing about running a blood lab, yet had a nose for insurance theft. He bought a struggling lab called Biodiagnostic Laboratory Services in Parsippany, N.J. Nicoll quickly turned the lab into a money-churning emporium of insurance fraud. read full story

Firefighter plunges to fiery death in flaming arson house

Patrick Wolterman raced into the flaming house. His firefighter’s trained instinct to save the elderly homeowners trumped his urge for self-survival that cold and snowy December night in the Cincinnati area. Wolterman didn’t know that the couple he tried to rescue were gambling in Las Vegas. Nor did he know that husband Lester Parker set up the fire, to steal $250,000 of insurance money. The first floor collapsed under Wolterman, weakened by flames licking up from the basement. He fell into the inferno below. His mask and helmet came off. Colleagues from the Hamilton Fire Department discovered Wolterman face down, dead of smoke inhalation. read full story

Pain for profit: Pills, stinging injections drive $300-million scheme

Addicts’ lives meant Lamborghinis for entrepreneur Mashiyat Rashid. The Detroit man helped flood the streets with 6.6 million doses of painkillers. He also forced down-on-their luck homeless people to submit to painful and worthless spine injections they didn’t need. Rashid’s crime ring soaked Medicare for $300 million. He was one of America’s largest prescribers of pain pills at a time when 115 Americans die from opioid overdoses each day.Homeless seniors were special targets of Rashid’s theft spree. Many were addicts. He forced them to get painful spinal injections they didn’t need, all in exchange for pain pills. The ultimatum: Get injections — or no drugs. read full story

Flames, floods wreck homes for insurance adjuster’s $14-million plot

Public insurance adjusters are hired to help fix damaged homes. Jorge Fausto Espinosa had a genius for wrecking them. The South Florida man burned and flooded dozens of homes for $14 million of inflated insurance claims. It was one of the most legendary adjuster plots in a state known for brazen insurance scams. Espinosa may go down as arguably the all-time Dangerous Don of shady adjusters in Florida. Espinosa earned a percent of insurance payouts he lined up for client homeowners. The bigger the damage, the larger his share. So Espinosa inflated claims like a hot-air balloon. An insurance insider, he knew how to game the insurance system like Picasso colored canvasses. read full story

Addicts’ identities stolen to bill $175 million of inflated rehab claims

Kirsten Wallace stole the identities of suffering and scared addicts to bill health insurers more than $175 million of inflated claims without the addicts’ consent. Adding to their misery, some were sexually abused. Lonely addicts came to Community Recovery Los Angeles, looking for hope and a clean life. In return, the Southern California woman helped foist one of the largest health-insurance scams in California history. Wallace co-owned the lucrative string of about 20 rehab facilities and sober homes for drug and alcohol addicts. Most were in the Los Angeles area. Addiction treatment is a large and thriving industry in Southern California. The region is a national hub of drug recovery, sometimes called Rehab Riviera. The firm bought in clients with online ads, from the streets and even from out of state. read full story

Tags:  fraud  insurance 

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Crime Doesn't Pay

Posted By Dennis Jay, Wednesday, January 10, 2018

from, December 12, 2017

The Newest Members of the Hall of Shame: 10 Join the Ranks of the Infamous

Bottom feeders bubbled to the surface when the newest crop of miscreants and misfits were chosen for the Insurance Fraud Hall of Shame. The No-Class of 2017 was officially dishonored by the Coalition Against Insurance Fraud (the Coalition).

The Hall of Shame recognizes America's worst convicted insurance scammers of the year. These moral invertebrates live by the rule of flaw and excel at being vicious and brazen. Consider the Hall of Shame a weapon of mass instruction that encourages honesty with all insurance dealings. Commit fraud and you’re as doomed as a lobster in a restaurant tank. Dishonoring these barons of bleak helps to reverse a lax mindset that lets this $80-billion crime persist year after year.

Far too many average consumers think it's alright to defraud insurers in certain situations, as soon-to-be-released research from the Coalition shows. People often view fraud as a lucrative, low-risk windfall. Nobody's harmed and insurers won't miss the money, right? Victimless-crime syndrome is an airborne disease, and the bacteria spreads unless challenged.

These shamers bring attention to insurance fraud as their true-life crime sagas rise above the hundreds of messages constantly vying for our attention. The shamers also serve as deterrents because their downfalls encourage more people to rethink their decisions and stay honest. Maybe a jail cell, personal ruin and your kids seeing you in prison stripes isn't worth the risk.

So meet the No-Class of 2017. They gambled, danced on dynamite, and lost everything.

Bumper crop

Michael Charles Young masterminded one of Sacramento's largest staged-crash rings ever. It was an attempted $500,000 insurer looting. Young bought cars through Craigslist, including many already damaged. He recruited friends and relatives to crash them, and invented paper wrecks. Young gave his paid crashers written scripts to follow when talking with insurers. About half of all claimed crashes involved stolen IDs used to register vehicles and file claims.

About 65 cronies and 100 vehicles were involved. Young used large numbers of vehicles and cohorts to cover up and evade detection. The vehicles also “crashed” only once to avoid suspicious claim patterns.

Investigators busted the scheme after watching one of Young's vehicles. The old heap never moved and was in such lousy shape that Young towed it to an insurance office to file a claim. He lied it was damaged in a collision that weekend. Young was towed to state prison for 10 years.

Burning ambition

David O’Dell thought Joseph Meyers was his best friend. Meyers thought O’Dell was disposable. Meyers and his wife Iryn burned him alive, torching his home for insurance payouts in Steuben County, N.Y.

Meyers and Iryn simply wanted O’Dell for insurance money. They’d collect $140,000 from coverage on a house they let O’Dell live in, home possessions and a life policy. The place burned up, and O’Dell was incinerated alive — his body a shrunken pile of dried-black flesh.

Surveillance footage showed the couple driving to O’Dell's home the night of the fire and carrying a propane torch plus a container of liquid. Joseph and Iryn each earned 23 years to life.

Flame and blames

The godfather of a massive arson ring stole about $1 million by torching homes and vehicles. Verdon Taylor's ring bought cheap homes and cars at auctions and foreclosure sales in the Richmond, Va. area. The ring over-insured and then torched them — 30 fires during a 16-year binge.

Ring members stuffed mobile and rental homes with furniture and clothing bought at flea markets or auctions. They re-used property they burned for earlier claims. Scammers often set fires just days after buying policies. Fire claims ranged up to $300,000. Taylor faces up to 50 years in federal prison when sentenced.

Unsober sober homes

Kenny Chatman spooned drugs to desperate addicts in his sober homes so they’d keep relapsing. Prolonging their addiction incited more than $25 million of inflated and often worthless rehab and drug testing claims in South Florida.

Addicts trying to get clean kept overdosing into misery at Chatman's corrupt healing homes. He also pimped out female addicts for extra cash. His corrupt sober-home empire was the poster child for a deadly opioid epidemic that made South Florida the epicenter of sober-home fraud in the U.S. Chatman was handed 27 1/2 years in federal prison.

Uncaring homecare

More than 11,000 healthy people were declared sick, infirm and homebound in Dr. Jacques Roy's mammoth $375-million looting of Medicare and Medicaid. The Dallas physician ran the largest and most-brazen home-healthcare con in U.S. history. Roy's recruiters bribed residents of homeless shelters to be phony “patients,” and also knocked on strangers’ doors.

Roy erected a factory line to lodge phony home healthcare claims. He had an entire department cranking out his signature and bogus medical “plans” nonstop. Roy landed 35 years in federal prison.

Baby killer

Nearly broke, Joaquin Rams wanted to live the good life. He murdered his 15-month-old baby Prince for more than $500,000 of life-insurance money. Little Prince died at Rams’ home in Northern Virginia. Investigators were unsure if Prince was drowned or suffocated. But Joaquin's shaky finances revealed his murder motive. Unemployed, he planned an expensive home upgrade and seemed strangely unemotional.

Rams was handed life without parole. Prince's murder touched off a national debate. Why would life insurers cover a baby for so much money?

Sinking feeling

Vincent Viafore drowned when his kayak capsized in the frigid Hudson (N.Y.) River. His fiancée Angelika Graswold tampered with the craft to ensure Vincent would tip over — earning her $250,000 in life insurance.

The river was cold and choppy near West Point. Viafore vanished underwater, his kayak adrift. He had no chance in the bone-chilling waters.

Graswald acted strangely after Viafore died. She sang “Hotel California” at a local pub, and posted social-media selfies showing her doing a cartwheel. It “felt good knowing he was going to die,” she told investigators. Graswald awaits sentencing.

Out of luck, on the run

Flamboyant lawyer Eric Conn stole more than $550 million by inventing injured and disabled patients. It was one of the biggest lootings of federal disability money in U.S. history. Conn helped injured people in the impoverished Kentucky and West Virginia coalfields collect disability payouts. Then he got greedy. Conn bribed a judge and doctors to rubber-stamp thousands of phony disability claims.

Conn also forged medical records before doctors even examined patients. He finally was busted, yet slipped out of his tracking bracelet and disappeared. Conn received 12 years in prison while on the run.

Homecare horror

Kids were locked in a bedroom fouled with their feces while their parents and hired caregiver feasted off Medicaid home-healthcare money. Brian and Melissa Harr had three kids aged four, five and twelve. One was severely disabled with intellectual limits and cerebral palsy. The child's caretaker, Deborah Branch, kicked back $200 in Medicaid money to the Bristol, Va. couple every 2 weeks. Branch hauled in nearly $208,000 of taxpayer money while doing no caretaking. She vacationed in Myrtle Beach, S.C., while her time sheets said she cared for the youth.

Investigators found a chamber of horrors: Excrement was everywhere. The room had no lights. The only furniture items were fouled mattresses. The windows were screwed shut. The Harrs each earned four years in federal prison, and Branch six years.

Painful painkillers

Dr. Shelinder Aggarawal was America's top prescriber of opioids to Medicare patients. Patients were “dropping like flies, they are all dying,” one anguished official said. The Huntsville, Ala. pain physician gave patients whatever pills they wanted — including patients he knew were addicts. It was a $9.5-million insurance soaking and abuse of desperate drug users.

Aggarawal saw up to 145 patients a day, typically for just five minutes or less. He spooned out more than 12.3 million pills in just one year — 423 scripts a day. He also fleeced private insurers. Prosecutors dropped Aggarawal into federal prison for 15 years.

Credit the relentless pursuit by fraud investigators and prosecutors. Their success allows the Hall of Shame to exist, and keeps America safer for honest consumers everywhere.

Tags:  crime  fraud  Hall of Shame  insurance 

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