Category Archives: Workers’ Compensation

$46 Million Stolen: 2013’s Top Ten 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. (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 (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, 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)

    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)

    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)

    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

    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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Legally Speaking – Volunteer Firefighters and Ambulance Workers

 

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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World Trade Center Registry Reopened and New Protections Accorded to Workers

On November 13, 2013, Governor Andrew M. Cuomo signed significant protections for World Trade Center workers into the Workers’ Compensation Law under Article 8-A. The legislation extends and enhances workers’ compensation eligibility and benefits for World Trade Center workers. Most notably, the legislation reopens the World Trade Center Registry; extends the deadline period for filing Form WTC-12, Registration of Participation in World Trade Center Rescue, Recovery and/or Clean-up Operations, with a deadline to September 11, 2014; reopens previously time-barred World Trade Center claims and considers them timely; and adds qualifying conditions to the law.

Reopening of Registry and Extension of Filing Period for Form WTC-12

The World Trade Center Registry, which preserves workers’ compensation rights for those who performed rescue, recovery, and clean-up operations after the World Trade Centerattacks, is now reopened and will remain open until September 11, 2014. Previously, any claims for which the associated Form WTC-12 was received after September 13, 2010 were time-barred. Those workers were not entitled to benefits. These claims will now be reopened and considered timely.

Workers who participated in the rescue, recovery, and clean-up operations of the World Trade Center between September 11, 2001 and September 11, 2002, should promptly register their service participation with the NYS Workers’ Compensation Board (Board). This registration will preserve workers’ rights to future benefits, should they ever be needed. Employed and volunteer workers should file a notarized Form WTC-12 prior to September 11, 2014, whether they were injured or not. Eligible work includes duty at Ground Zero, the Fresh Kills Landfill, duty on the barges and piers, and the morgues. Paid workers and volunteers covered under the New York State workers’ compensation system are eligible. The filing of the registration Form WTC-12 does NOT constitute the filing of a claim. The filing of the sworn statement does, however, extend the time to preserve the workers’ right to file a claim. Instructions are provided on the Form WTC-12 regarding the filing of a claim. Specifically, when the time comes to file a claim, an injured worker or volunteer should submit Form C-3, Employee Claim, for compensation or Form WTCVol-3, World Trade Center Volunteer’s Claim for Compensation, to the Board.

A completed Form WTC-12 can be submitted to any Board office. Completed forms must be received at any Board office by September 11, 2014. A postmark by this date is not sufficient. Workers can obtain Form WTC-12 from any Board office or from the NYS Workers’ Compensation Board website.

These changes are included in Workers’ Compensation Law § 162.

Previously Time-barred World Trade Center Claims

As stated earlier, any Form WTC-12 filings that were received after the previous original September 13, 2010 deadline are now considered timely. (The deadline was stated in Article 8-A as September 11, 2010, a Saturday;, however, the Board accepted filings that arrived on Monday, September 13, 2010, as timely.)

The Board will review its files to locate any World Trade Center claims previously disallowed asuntimely under Workers’ Compensation Law §§ 18 or 28, or from failure to file a timely Form WTC-12. The Board will, under its own initiative, now allow those particular World Trade Center claims and consider them timely. Workers whose Form WTC-12 were previously deemed untimely will be notified that their cases are no longer time-barred and instructed on how to obtain benefits should they become injured or ill. While the Board will be pro-actively checking its own files and providing notice to claimants, claimants should feel free to contact the Board, so that the Board may provide specific information regarding the reconsideration process. All parties will be notified that their cases are being reopened as their cases are brought forward for consideration. While it is not necessary for claimants to file reopen or hearing requests, the Board wishes to make workers aware that this process is now being initiated.

These changes are in Workers’ Compensation Law §§ 165 and 168.

Qualifying Conditions

Article 8-A now contains a new list of qualifying health conditions resulting from hazardous exposure for World Trade Center workers who participated in rescue, recovery, or clean-up operations. The categories are:

  • Diseases of the upper respiratory tract and mucosae, including conditions such as conjunctivitis, rhinitis, sinusitis, pharyngitis, laryngitis, vocal cord disease, upper airway hyper-reactivity, and tracheo-bronchitis, or a combination;
  • Diseases of the lower respiratory tract, including but not limited to, bronchitis, asthma, reactive airway dysfunction syndrome, and different types of pneumonitis, such as hypersensitivity, granulomatous, or eosinophilic;
  • Diseases of the gastroesophageal tract, including esophagitis and reflux disease, either acute or chronic, caused by exposure or aggravated by exposure;
  • any combination of such conditions; and
  • New onset diseases that develop in the future or result from exposure in the future, including cancer, COPD, asbestos-related diseases, heavy metal poisoning, musculoskeletal disease and chronic psychological disease.

These changes are in Workers’ Compensation Law § 161(3).

Outreach

The Board is committed to ensuring all World Trade Center workers receive the benefits and protections they are accorded under the law. To help achieve this, the Board is in the process of expanding our communication and outreach to World Trade Center workers. Our initiatives include:

  • Translating Form WTC-12 into the seven common languages other than English, designated by the Board’s Language Access Plan;
  • Reopening a dedicated phone line for World Trade Center workers, 1-855-WTC-2014 (1-855-982-2014);
  • Adding a dedicated page to the Board website for World Trade Center workers, www.wcb.ny.gov/WTC-12;
  • Using traditional and social media to reach World Trade Center workers;
  • Planning outreach to workers and groups representing World Trade Center workers; and
  • Mailing letters to previous untimely filers.

The Board’s dedicated World Trade Center work groups and hearing parts have functioned continuously since September, 2001

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Mets’ Harvey Is Covered Like Any Other Employee With a Workplace Injury

For all of the Mets fans out there, we wanted to share this interesting development, originally reported by The New York Times. 

If Mets pitcher Matt Harvey has Tommy John surgery on his right elbow, it will be paid for, partly, with workers’ compensation insurance. A partly torn ulnar collateral ligament like Harvey’s is considered a workplace injury, just as if he were a truck driver hurt on a loading dock.

The basic agreement between major league owners and players requires that teams pay the cost of injuries.

“The employer gets to recover, as an offset, any workers’ compensation recovery that is available,” said Rob Manfred, an executive vice president of Major League Baseball. “And the club is on the hook for what workers’ compensation doesn’t pay.”

At some point after an operation or procedure, a player signs a form that allows his team to pursue the insurance claim. So if workers’ compensation did not pay the full cost of Derek Jeter’s surgery for a fractured left ankle last year, the Yankees made up the difference — essentially the cost of doing business.

“The player never sees a bill,” Manfred said.

Another factor is that the cost of Tommy John surgery is not uniform. Dr. James Andrews, the renowned orthopedic surgeon, might charge more than the Hospital for Special Surgery, where the Mets’ medical director, David Altchek, is an orthopedic surgeon. (Andrews prescribed a six- to eight-week rehabilitation program for Harvey earlier this week that would precede any decision to operate.)

Altchek…

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Depositions: When the truth is “I don’t know”

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

“Tell the truth” is some good advice we’ve all heard and hopefully listened to once in a while. However, when it comes to having your deposition taken, this advice can take on a slightly different meaning. Our experienced attorneys guide hundreds of clients through depositions each year, so we often see this challenge.

It is human nature to seek answers to our questions. But sometimes in our quest for satisfaction, we have a hard time resisting the urge to make a leap or two, or start to speculate, or make assumptions about potential solutions. This is particularly true when we are faced with a formal line of questions such as those asked in a deposition. We feel guilty and lacking somehow if we don’t know the answer to a question, or we can’t remember a name or date or what happened between the blow to the head and waking up in the hospital. … It gives us a good feeling inside and relieves a little pressure to at least try to put the puzzle pieces together for the person asking the question. We’re nervous, and it just goes against our helpful natures to simply say “I don’t know.”

Sometimes, though, this very human trait can lead to problems for a case. At some point in the midst of these leaps in logic and speculation on answers to questions, our answer can transform into something that is no longer the truth. While speculating or thinking out loud isn’t lying, when you get down to it, it isn’t really telling the truth either. Sometimes the absolute, 100% honest-to-goodness truth is simply, “I don’t know” or “I don’t remember,” and that is a perfectly okay answer to give. When your words have the power to potentially damage your case, it is important to choose them wisely, and remember you do not need to give in to the pressure of making assumptions or jumping to conclusions to come up with a satisfactory answer. Just tell the truth.

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Why Overturning DOMA Is a Win for Employee Rights

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

Regardless of your opinion on the issue of gay rights, Wednesday’s U.S. Supreme Court decision overturning the Defense of Marriage Act is a win for workplace fairness.

The constitutional authorization for most federal fair-employment laws is based on the guarantees of equal protection of the law based on the Fifth and 14th Amendments to the U.S. Constitution and the right of Congress to regulate interstate commerce clause. In his opinion overturning DOMA, Justice Anthony Kennedy found that DOMA violated the Fifth and 14th Amendment rights of gays and lesbians. He reaffirmed the role of the Fifth and 14th Amendments in preventing discrimination.

Kennedy’s opinion is important because in last summer’s blockbuster Supreme Court decision upholding the Affordable Care Act, Chief Justice John Roberts undercut the interstate commerce clause as a justification for passing federal legislation. Conceivably, corporate opponents of workplace fairness laws could point to Roberts’ decision in the Affordable Care Act as a way to argue that federal workplace fairness laws are unconstitutional. However Wednesday’s decision in the DOMA case means that workplace fairness laws still have clear and strong constitutional support.

The DOMA decision is a bright spot in a Supreme Court session that has otherwise been pretty bleak for employees. My opinion is that as a result of recent Supreme Court decisions, more and more fair-employment cases will be brought in state court. The decision in DOMA is still relevant to state law discrimination and retaliation claims. Most states have equal protection clauses in their state constitutions. The reasoning supporting the DOMA decision supports state fair-employment statutes. I believe this is true even for fair employment claims based on retaliation. As Justice Ruth Bader Ginsberg pointed out in her dissent in Nassar, retaliation is a form of discrimination. In other words, if you have been fired in retaliation for filing a workers’ compensation claim, your constitutional rights have been violated. If the Supreme Court had decided DOMA differently, employees would have a weaker argument that a retaliatory discharge violated their equal protection rights.

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Suicides in the U.S. Military: An Epidemic; What about Workers’ Compensation?

Today’s post comes from guest author Leila A. Early from The Jernigan Law Firm.

In 2012, suicides in the U.S. military were at a record high of 349, which was higher than the 295 American combat deaths in Afghanistan in 2012. This number is up from 301 in 2011. The Pentagon has had a difficult time dealing with this epidemic, which likely stems from military personnel being in combat for more than a decade in Afghanistan and Iraq, complicated by anxiety over being forced out of the military due to a “shrinking force.”

In 2011, 65% of soldiers who attempted suicide had a history of behavioral problems; however, only 45% of those who actually killed themselves had such a history. If there are signs that these service members were asking for help, they were not getting the help that they needed.

What’s interesting is that the U.S. military keeps statistics on suicides, and when the numbers go up to alarming rates the  hope is that something will be done to investigate. For years, workers’ compensation lawyers have heard about suicides from employees who did not get proper medical care, who could not handle the abuse that sometimes happens within the system, and who could no longer stand the pain of permanent injuries, disability and resulting depression. But where are the statistics on these deaths? The insurance industry either has this information or it could get it. As a matter of public policy, should they be required to report it?

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