Tag Archives: fraud

Mayberry Sheriff Andy Taylor Would be Blushing Right Now

Andy Griffith as Sheriff Andy Taylor

Today’s post comes from guest author Leonard Jernigan, from The Jernigan Law Firm.

Mayberry was a small town, loosely based on Mount Airy, N.C., the hometown of actor Andy Griffith, who played the part of Sheriff Andy Taylor. Mayberry was a slow, sleepy town where city slickers came by occasionally and Andy or Deputy Barney Fife or some other innocent person smoked them out and the story usually ended on a good moral note.

But my goodness, if Sheriff Taylor was around today (Griffith died in 2012) he would be blushing at what has transpired in Mount Airy, N.C. this year. A city slicker has taken taxpayer dollars to bring jobs to Mount Airy, but it turns out he’s a convicted felon in the state of California. That’s bad enough, but after Todd Tucker, president of the County Economic Development Partnership, was told about this conviction for fraud, he is still standing by his man. Incredible. L.D. Hardas, President of Awesome Products, was convicted in California in September of underreporting his workers’ compensation payroll by more than $8 million and sentenced to five years in jail, suspended if he paid a fine and unpaid premiums and completed 10 years of probation.

In February he was hailed as the savior of Mount Airy when he promised to create 140 jobs by opening a household chemical plant out of a former furniture facility. In exchange, he was eligible for $300,000 of state funds and at least $543,448 from Surry County taxpayers. What’s the lesson for Mayberry? It’s okay to cheat another state and their employees as long as you help Mount Airy get some jobs and bring some money to the county. Wonder what Aunt Bee and the boys at the barber shop would say about that.

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Misclassification – Department of Labor Recovery

Today’s post comes from guest author Leonard Jernigan, from The Jernigan Law Firm.

The U.S. Department of Labor has recovered more than $1 million in back wages and liquidated damages for 196 employees of Bowlin Group LLC and Bowlin Services LLC out of Ohio and Kentucky. Bowlin Services installed cable for Insight Communications, a cable, telephone and Internet provider in Kentucky. The defendants misclassified 77 employees as independent contractors and violated the Fair Labor Standards Act (FLSA) by denying these workers access to critical benefits, including minimum wage, overtime, family and medical leave, unemployment insurance, workers’ compensation and failing to maintain accurate payroll records.

Misclassifying employees negatively impacts our economy, generating losses to the U.S. Treasury, Social Security and Medicare funds, state unemployment insurance, and state workers’ compensation funds. It also leads to unfair competition because businesses that play by the rules are at a disadvantage.

This problem has become so acute in Tennessee that last month the legislature passed Senate Bill 833, which has been signed into law and imposes penalties on construction companies for misclassifying workers in an attempt to evade workers’ compensation premiums. A Tennessee study in 2012 revealed losses of up to $91.6 million in workers’ compensation premiums. North Carolina has identified the problem but has yet to take any action. Until states aggressively prosecute misclassification, this fraud will continue.

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Private Investigators in Workers’ Compensation

Corporations sometimes hire private investigators to verify that your claim is not fraud

Today’s post comes from guest author Leonard Jernigan of North Carolina.

As a workers’ compensation attorney I find it interesting that many people in the public question the disability status of injured workers. Let’s assume for the moment that you have sustained an injury on the job and you’ve been out of work for 5 months after back surgery. When you are unable to return to work quickly, the insurance industry has a lot of tools at its disposal to verify your disability status. They can pour over your medical records, pre- and post-injury, looking for any piece of evidence to deny your claim. They can send your file to lawyers who review medical records and recorded statements to potentially attack your credibility and honesty. They can hire a nurse to attend your appointments and speak with the physician and the staff, as well as obtain information directly from you. They can do background searches on you to see if you have a criminal or civil record. Obviously they will check to see if you ever filed a workers’ compensation claim before. They will also do social media and Internet searches on you and your family members (Facebook, Twitter, LinkedIn, etc.). They also can hire private investigators to follow you and your family around and take video recordings of your activities. With all these resources at the disposal of the insurance company, it’s hard to believe that many cases of employee fraud slip through the system.

A private investigator pretended to be a potential buyer and spent an hour or more going through the house.

We have one client recently who was followed by several private detectives for more than a year. They not only followed him around, but also followed his wife and son, who have no workers’ compensation claim. Another client had to sell his house because of his disability. A private investigator pretended to be a potential buyer and spent an hour or more going through the house. Does the concept of “Big Brother” come to mind? Are you concerned about invasion of privacy, particularly for family members, friends, and others who may be seen in such videos? We always tell our clients such activity may occur so don’t be alarmed by it, but that isn’t too comforting to people who are struggling through health issues, who have depression and anxiety problems, and who are sensitive to privacy concerns.

It would be interesting if the roles were reversed and employers who underpay premiums by misclassifying the status of their employees, who fail to purchase insurance required to protect their workers, and who don’t follow proper safety regulations that cause injury, were followed this closely by employees or regulators who administer the workers’ compensation program. I have no doubt that these employers and insurance representatives would be outraged.

 

 

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Workers Beware Questionable (Fraudulent) Employer Tactics

It’s time to start talking about employer fraud.

Today we have a guest post from our colleague Tom Domer of Wisconsin. 

Over the course of 35 years representing injured workers, I have heard some whoppers – Employers’ questionable tactics that make even my jaw drop. With all the insurance company generated blather about “employee fraud” incidences of employer fraudulent tactics abound. Workers beware of the following:

  • Recorded statements taken by worker’s compensation carrier adjuster while employee is under medication or in the hospital still suffering from the injury. Questions such as “It’s true you had (low back pain, arm pain, fill in the blank pain, etc.) before your work injury, correct? You’ve had lots more pain from (your motor vehicle accident, sports injury, etc.) than you’re experiencing from your work injury, correct?
  • Employer “channeling” a work to its “Return to Work Clinic” (doctors on company payroll whose opinion is “like some athletic coaches, ‘rub some dirt on it and get back in the game’.”
  • Telling employees to take sick leave rather than claim worker’s compensation.
  • Telling employees to file medical bills under their group insurance, not worker’s comp.
  • Nurse Case Manager who initially befriends the employee but later makes every attempt with the worker’s doctor to prematurely return the worker to the job before a healing occurs.
  • Employer paying worker in cash with no payroll stub (or gives workers a Form 1099 rather than a W-2). Continue reading

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$100 Million Fraud in New Hampshire

New Hampshire Local Government CenterOur good friend and colleague Jon Gelman posted this recent piece of news on his blog the other week:

A New Hampshire insurance group has been charged by the State with improperly appropriating millions of dollars of taxpayers’ funds to a workers’ compensation insurance plan. The improper allocation is described in a petition filed by the State.

To provide a bit more detail, the amount of misappropriated funds is actually estimated at upward of $100 million. The, or LGC, is a non-government, non-profit organization that provides a range of services to municipal governments. LGC is an umbrella organization with subsidiaries that offer services in areas such as finance, personnel, and legal. They also provide a range of insurance programs that municipalities and their employees may buy into.

In this case, the municipal employees thought that they were paying for LGC’s HealthTrust and Property-Liability insurance programs. Instead LGC used the funds to pay for a completely separate workers’ compensation insurance program.

LGC asserts that they did nothing inappropriate, even though what they did is clearly illegal and they used some very tricky tactics to circumvent the law. Continue reading

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