Author Archives: Catherine Stanton

$46 Million Stolen: 2013’s Top Ten Workers’ Compensation Fraud Cases

Professor Leonard T. Jernigan Jr. has compiled a list of 2013’s Top 10 Workers’ Compensation Fraud Cases

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

Employer Fraud Cases (9):$44,064,492.00
Employee Fraud Cases (1): $1,500,000.00
Total: $45,564,492.00

Every year we hear about fraud in Workers’ Compensation cases and the public believes the fraud is employee driven. However, in 2009 I began tracking the Top Ten Fraud Cases and 100% of the Top Ten between 2009-2012 involved employers or shady characters posing as legitimate businesses. The amount of employer fraud is staggering. In 2013 one employee fraud case did crack the Top Ten, so the record is now 49-1 (employer fraud v. employee fraud) over the past five years.

  1. Florida: Owners of Diaz Supermarkets in Miami-Dade are Accused of $35 Million Fraud (4/16/13)

    John Diaz and his wife Mercedes Avila-Diaz owned and operated four supermarkets in the Miami-Dade area. They have been arrested and accused of workers’ compensation fraud and other fraudulent transactions totaling $35 million. One business they operated had no coverage for employees for ten years. They allegedly engaged in a scam to help subcontractors obtain false certificates of insurance that allowed the subs to work for general contractors who required the certificates.

  2. California: Hanford Farm Labor Contractor Convicted of Fraud in the Amount of $4,195,900 (12/6/2013)

    Richard Escamilla, Jr.

    Richard Escamilla, Jr. (47), owner of ROC Harvesting, misrepresented information to workers’ compensation insurance carriers by using new business names to obtain insurance and avoid providing a claim history. Escamilla pleaded guilty on October 29th and was sentenced to pay restitution of $4.1 million and serve six years in prison.

  3. Michigan: Insurance Executive Embezzled $2.6 Million from Workers’ Comp TPA (06/06/2013)

    Jerry Stage

    Jerry Stage (67), the former CEO of a non-profit workers’ compensation insurance company, and George Bauer (55), the bookkeeper, both pleaded guilty to embezzling from the Compensation Advisory Organization of Michigan (CAOM) for more than a decade. Mr. Stage embezzled $2.6 million from the company and conspired with Mr. Bauer to cover up the embezzlement.

  4. California: Employee Wasn’t Wheelchair Bound After All – Fraudulently Took $1.5 Million in Benefits (8/9/13)

    Yolandi Kohrumel

    Yolandi Kohrumel, 35, claimed for nine years that she was wheelchair bound after complications from toe surgery, but after she had collected $1.5 million in benefits it was revealed her claim was false. Her father, a South African native, was also engaged in the scam. Both pleaded guilty to insurance fraud, grand theft and perjury. Ms Kohrumel was sentenced to one year in jail, plus restitution.

  5. California: Father and Son Landscapers Accused of $1.45 Million in Insurance Fraud (5/7/13)

    Sunshine Landscaping

    Jesse Garcia Contreras (57) and Carlos Contreras (33), who operate a Thousand Palms landscaping business, are accused of committing $1.45 million in insurance fraud. They are accused of defrauding the California State Compensation Insurance Fund by misclassifying employees from January 2008 to March 2012. Mr. Jesse Contreras is the president and CEO of Sunshine Landscaping and his son is Director of Accounting. If convicted, they each face up to 19 years and 8 months in prison.

  6. Florida: Workers’ Compensation Check Cashing Operation Charged with $1 Million in Fraud (2/27/13)

    As a result of its investigation of I&T Financial Services, LLC, a company that was allegedly set up to execute a large scale check cashing scheme for the purpose of evading the cost of workers’ compensation coverage. Domenick Pucillo, the ringleader of the fraud scheme, was arrested and charged with filing a false and fraudulent document, forgery, uttering a forged instrument, and operating an unlicensed money service business. If convicted on all charges, he faces up to 45 years in prison. $1 million was seized during this investigation.

  7. West Virginia: Coal Company Contractor in Mingo County Caught in $405,000 Scam to Avoid Workers’ Comp Premiums (11/6/13)

    Bank of Mingo

    Jerame Russell (50), an executive with Aracoma Contracting, LLC, a company that provided labor to coal companies on a contract basis, entered a guilty plea to a scam that involved funneling over $2 million through a local bank to pay employees in cash, thus avoiding payroll taxes and $405,000 in workers’ compensation premiums. Aracoma also bribed an insurance auditor to cover up its true payroll.

  8. Ohio: Roofing Business Owners Guilty of $283,592 in Workers’ Comp Fraud (7/30/2013)

    Frederick Diebert

    The owners of Triple Star Roofing were found guilty of fraud on July 15 for failing to report payroll to the Ohio Bureau or Workers’ Compensation(BWC). The company failed to report to the BWC from 2004 to 2008, resulting in under-reported premiums of $283,592.

  9. Florida: Owner of Staffing Company arrested for $130,000 in Workers’ Comp Fraud

    Preferred Staffing of America, Inc.

    The owner of Preferred Staffing of America, Inc., a temporary staffing agency in Tampa, has been arrested for allegedly running an organized workers’ compensation fraud scheme. Preferred Staffing’s owner misled clients into believing that his company was a licensed professional employer organization (PEO) and could provide workers’ compensation insurance coverage. Employers were reportedly charged more than $130,000 for workers’ compensation insurance and other services that were never provided.

For more information, contact: Leonard T. Jernigan, Jr. Adjunct Professor of Workers’ Compensation N.C. Central School of Law The Jernigan Law Firm 2626 Glenwood Avenue, Suite 330 Raleigh, North Carolina 27608 (919) 833-0299 ltj@jernlaw.com www.jernlaw.com @jernlaw

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After Bangladesh Factory Collapse, Bleak Struggle for Survivors

Today’s post was shared by Gelman on Workplace Injuries and comes from www.nytimes.com

SAVAR, Bangladesh — Inside the single room he shares with his wife and young child, Hasan Mahmud Forkan does not sleep easily. Some nights he hears the screams of the garment workers he tried to rescue from the wreckage of the Rana Plaza factory building. Or he dreams the bed itself is collapsing, sucking him down into a bottomless void.

A few miles away, at a rehabilitation center for the disabled, Rehana Khatun is learning to walk again. She lost both legs in the Rana Plaza collapse and worries that she is not improving because her prosthetic replacements are bulky and uncomfortable. She is only 20 and once hoped to save money so she could return to her village and pay for her own wedding.

“No, I don’t have that dream anymore,” she said, with a cold pragmatism more than self-pity. “How can I take care of a family?”

Eight months ago, the collapse of Rana Plaza became the deadliest disaster in the history of the garment industry, and many of the survivors still face an uncertain future. The shoddily constructed building pancaked down onto workers stitching clothes for global brands like Children’s Place, Benetton, C & A, Primark and many others. Workers earning as little as $38 a month were crushed under tons of falling concrete and steel. More than 1,100 people died and many others were injured or maimed.

But while the Rana Plaza disaster stirred an international outcry — and shamed many international clothing companies…

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A Day In The Life Of Ted the Tea-Partier

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

     Ted gets up at 6 A.M. and fills his coffeepot with water to prepare his morning coffee.  The water is clean and good because some tree-hugging liberal fought for government-enforced minimum water-quality standards. 

     With his first swallow of coffee, he takes his daily medication. His medications are safe to take because some stupid commie liberal fought to have the government insure their safety and that they work as advertised.  All but $10 of his medications are paid for by his employer’s medical plan because some liberal union workers fought their employers for paid medical insurance – now Ted gets it too.

     He prepares his morning breakfast, bacon and eggs.  Ted’s bacon is safe to eat because some girly-man liberal fought for laws to regulate the meat-packing industry. 

     In the morning shower, Ted reaches for his shampoo.  His bottle is properly labeled with each ingredient and its amount in the total contents because some crybaby liberal fought for his right to know what he was putting on his body and how much it contained.

     Ted dresses, walks outside and takes a deep breath.  The air he breathes is far less polluted than decades ago because some wacko liberal environmentalist fought for laws to stop industries from polluting our air.

     Ted begins his workday. He has a good job with decent pay, medical benefits, retirement, paid holidays and vacation because some lazy liberal union members fought and died for these working standards.  Ted’s employer pays these standards because Ted’s employer doesn’t want his employees to call the union.  If Ted is hurt on the job or is laid off, he’ll get workers’ compensation or unemployment because some stupid liberal didn’t think he should lose his home because of his temporary misfortune.

     It’s noontime, and Ted needs to make a bank deposit so he can pay some bills. Ted’s deposit is federally insured by the FSLIC because some godless liberal wanted to protect Ted’s money from unscrupulous bankers who ruined the banking system before the Great Depression and nearly collapsed the banking system again in 2008, saved only by a tax-payer bailout.

     Ted is home from work, and drives to visit his father this evening at his farm home in the country.  His car is among the safest in the world because some America-hating liberal fought to have the government enact car safety standards.

     He arrives at his boyhood home.  His was the third generation to live in the house financed by Farmers’ Home Administration because bankers didn’t want to make rural loans.  The house didn’t have electricity until some big-government liberal stuck his nose where it didn’t belong and demanded rural electrification.

     He is happy to see his father, who is now retired.  His father lives on Social Security and a union pension because some wine-drinking, cheese-eating liberal made sure he could take care of himself so Ted wouldn’t have to. Ted gets back in his car for the ride home, and turns on a radio talk show.  The radio host keeps saying that liberals are bad and hate their country.  He doesn’t mention that his radical, anti-government Republicans  have, over many decades, fought against each and every one of these protections and benefits Ted enjoys throughout his day.

     Ted agrees:  “We don’t need those big-government liberals ruining our lives!  They’re taking away our freedoms!  After all, I’m a self-made man who believes everyone should take care of themselves, just like I have.”

Photo credit: outtacontext / Foter.com / CC BY-NC-ND

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As Robot-Assisted Surgery Expands, Are Patients And Providers Getting Enough Information?

Today’s post was shared by Gelman on Workplace Injuries and comes from www.kaiserhealthnews.org

The use of robotic surgical systems is expanding rapidly, but hospitals, patients and regulators may not be getting enough information to determine whether the high tech approach is worth its cost.

Problems resulting from surgery using robotic equipment—including deaths—have been reported late, inaccurately or not at all to the Food and Drug Administration, according to one study.

The study, published in the Journal for Healthcare Quality earlier this year, focused on incidents involving Intuitive Surgical’s da Vinci Robotic Surgical System over nearly 12 years, scrubbing through several data bases to find troubled outcomes. Researchers found 245 incidents reported to the FDA, including 71 deaths and 174 nonfatal injuries. But they also found eight cases in which reporting fell short, including five cases in which no FDA report was filed at all.

The FDA assesses and approves products based on reported device-related complications. If a medical device malfunctions, hospitals are required to report the incident to the manufacturer, which then reports it to the agency. The FDA, in turn, creates a report for its Manufacturer and User Facility Device Experience database.

The use of surgical robots has grown rapidly since it was first approved for laparoscopic surgery (a type of surgery that uses smaller incisions than in traditional surgery) by the FDA in 2000. Between 2007 and 2011 the number of da Vinci systems installed increased by 75 percent in the United…

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Legally Speaking – Volunteer Firefighters and Ambulance Workers

Catherine M. Stanton

Catherine M. Stanton

Catherine M. Stanton

Hello friends!  Today’s editorial is going to discuss Volunteer Firefighters and Ambulance Workers and their rights under New York State Workers’ Compensation Law.

While paid New York City firefighters are covered by special contract, and not covered under New York State Workers’ Compensation Law, all New York State active volunteer firefighters in a county, city, town, village or fire district are entitled to benefits under the law if they are injured in the line of duty.  Most New York State active volunteer ambulance workers are entitled to benefits as well.

To be entitled to benefits, a firefighter must be engaged in activities pursuant to orders or authorization that include, but are not limited to, participation in fire drills, parades and funerals; travel to and from fire calls or authorized activities; firehouse duties; property inspections; and maintenance and repair of equipment.

Volunteer ambulance workers must be engaged in duties at the ambulance facility or elsewhere, including but not limited to, public exhibitions and drills; attendance at training school; travel to and from calls directly related to the prevention of accidents or other disasters; delivery of emergency health care; instruction in ambulance duties; or maintaining equipment.  The benefits depend on the seriousness of the injury and the length of disability.

 A determination of the benefits will be made…

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Legally Speaking – Afraid To File A Claim?

As a 25-year attorney in the field of Workers’ Compensation, I have represented thousands of injured workers and heard all kinds of stories — many involving workers who didn’t file a Workers’ Comp claim for one reason or another. Some of the most frequent reasons I’ve heard from workers who get injured on the job and don’t file a claim include fear of getting fired, or intimidation by a system that seems cumbersome and hard to navigate.

First of all, it is against the law for an employer to fire you in retaliation for filing a Workers’ Compensation claim.  You should know that Workers’ Compensation is a no fault system. In exchange for timely payment of medical and indemnity benefits, workers gave up the right to sue their employer.   These laws went into effect in the early 20th Century as a result of social reform and tragedy.  While every state in the nation has some form of Workers’ Compensation laws, they all vary in scope and date of inception.  In New York, the pivotal event that culminated in the passage of Workers’ Compensation legislation occurred in 1911 after the horror of the Triangle Shirtwaist Factory fire, where 146 individuals perished — some burned to death while others leapt to their deaths when they tried to escape the fire and found the emergency exits locked.  This was a preventable tragedy caused by unsafe work conditions and was a catalyst for…

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Six Tips for Safe and Fair Holiday Employment

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

This time of year, many people get holiday jobs to earn extra money. That means some people will get injured at work and run into other difficulties working holiday jobs. Here are six tips on how to deal with the workplace challenges arising from holiday jobs. These tips for safe and fair employment apply just as well to any second job, not just a holiday job. 

  1. Just because you have a “holiday job” doesn’t necessarily make you a seasonal employee: In some states, including my home state of Nebraska, employees can have their benefits reduced if they are a “seasonal employee.” However, even if you have a holiday job, your job may not be seasonal. In Nebraska, “seasonal employment” is defined as a job that is dependent on weather or can only be done during certain times of the year. For example, if you hurt your back working at an electronics store at your holiday job, that employment is not seasonal because you can work at an electronics or really most any retail store at any time of the year.
  2. You can’t be paid workers’ compensation for how your holiday or second job affects your regular job: If you are off work at your regular job because of an injury at your second job or holiday job, you are only paid income-replacement benefits for the income you lost at your holiday job or second job. For example in Nebraska, if you were hurt at your holiday/second job that pays $120 per week and you are unable to do your regular job that pays $600 per week, your only income benefit would be two-thirds of your second/holiday job, which would be $80. Employees should be extra cautious in second jobs or holiday jobs for just that reason. Employees should also consider applying for private disability plans if they plan on having a second job in order to account for the possibility of losing income due to an injury at their second job. In short, employees should do a thorough cost-benefit analysis before taking a holiday job or second job.
  3. Your permanent disability benefits could be better than your temporary benefits: In full-time employment, permanent and temporary disability benefits are generally fairly close. But with part-time employment, permanent disability benefits may be much higher than temporary benefits. In my state of Nebraska, temporary benefits are paid based on a typical work week. For example, if you are a part-timer working 12 hours a week at $10 per hour, your temporary disability pay would be $80 a week. However, in Nebraska and some other states, permanent disability is based on no less than a 40-hour week. So if you are a part-timer getting paid $10 per hour, your permanent disability rate would be $266.67 per month. This is good for employees, because serious injuries will usually have permanent effects that can permanently affect an employee’s ability to earn a living.

    If you are an injured part-time worker and your insurance company is trying to force you to take a settlement based on your part-time wage rate, you should consult with an attorney in your state.

  4. Your employer/insurer may be low-balling your wage rate: Say you get paid $8 an hour as a barista but you have an agreement to share tips, or you work in retail but you get store credit, or you teach exercise classes at a health club but you have an agreement that you get a free membership. In any of those scenarios, you could possibly use those benefits to increase your loss-of-income benefits. 
  5. You are still protected by most fair-employment laws: Part-timers are still covered by most fair-employment laws. The most glaring exception is likely the Family and Medical Leave Act (FMLA), which provides 12 weeks of unpaid leave and job protection for employees with a serious health condition, to care for a close family member with a serious health condition, or take care of a close family member who is affected by a military deployment. FMLA requires 1,250 hours worked in the last calendar year and 1 year of employment. That 1,250 hours a year translates to roughly 24 hours a week. Many people working second jobs don’t meet the eligibility standards for FMLA. 
  6. Independent contractor, independent conschmacktor: Many holiday employees do fairly low-wage work that doesn’t require any specialized training or education. If this describes your holiday job or second job, then you are an employee, despite the fact that your company may have classified you as an independent contractor. Since you are an employee, you should be covered by workers’ compensation law. If you are misclassified as an independent contractor, you should look for other employment and consider reporting your unscrupulous employer to the United States Department of Labor or to your state’s department of labor.

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We Support Brandworkers

Attending the 2013 Brandworkers Awards Dinner

On Wednesday October 16, several members of our firm attended the Annual Brandworkers’ Dinner held at the Angel Orensanz Foundation in NYC. Brandworkers was founded in 2007 by retail and food employees who identified a need for an organization dedicated to protecting and advancing their rights. The organization was launched based on a simple principle: that working people themselves, equipped with powerful social change tools, were uniquely positioned to make positive change on the job and in society.

By empowering retail and food employees with social change tools, Brandworkers’ Focus on the Food Chain and Legal Defense-Plus programs have recovered close to $1 million in unpaid wages and compensation for discrimination; improved working conditions for hundreds of workers; and have helped workers develop as powerful social change leaders.

We look forward to continuing our  support of their mission!

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