Workers’ Comp Fraud News: Payroll Scam, False Claim, Collecting Deceased’s Benefits

A Pflugerville, Texas, landscape company pleaded guilty March 21 to misrepresenting its payroll so it could pay less for workers’ compensation coverage.

Jammers Groundscapes entered the plea in a Travis County District Court and was ordered to pay $400,000 to Texas Mutual Insurance Company, the workers’ compensation carrier. The conviction resulted from a Texas Mutual investigation.

The Texas Department of Insurance, Division of Workers’ Compensation’s (DWC) prosecution unit obtained the conviction. The DWC prosecution unit is embedded in the Travis County District Attorney’s Office and was created during the 85th Texas Legislature.

Workers’ compensation premiums are based on an employer’s payroll, job classification codes, and the employer’s past losses which are used to estimate future losses. Manipulating or misrepresenting one or more of these factors to get lower rates is premium fraud. From 2009 to 2015, Jammers Groundscapes defrauded Texas Mutual by concealing payroll associated with a related company that didn’t carry workers’ compensation insurance. This misrepresentation of payroll resulted in a lower workers’ compensation policy premium.

A Lynnwood, Wash., woman has been sentenced to community service after admitting she lied when she claimed she wasn’t working while receiving workers’ comp benefits.

Shari Lee Kristiansen pleaded guilty earlier this month to making a false or misleading statement to the state Department of Labor & Industries (L&I).

King County Superior Court Judge Pro Tem Ken Comstock sentenced Kristiansen to serve 180 hours of community service. Under terms of the deferred sentence, the gross misdemeanor charge will be dismissed after two years if she makes no further false statements to L&I, does not break the law, and complies with other requirements.

In pleading guilty, Kristiansen stated she made a false or misleading statement when she signed an L&I form verifying that she wasn’t employed when she was actually working part-time.

The Washington Attorney General’s Office prosecuted the case based on an L&I investigation.

Kristiansen filed a claim with L&I in March 2013, saying she injured her thumbs and hands while working as a dental hygienist for several dentists in King and Snohomish counties.

L&I provided medical and wage-replacement benefits to Kristiansen based on her physicians’ assessments and her signed declarations. An L&I investigation later found she worked for various dentists for much of the time she was receiving workers’ comp benefits.

L&I started the investigation after a routine comparison of L&I and state Employment Security Department records.

A Hudson County, N.J., woman has been charged with stealing more than $46,000 by fraudulently collecting her mother’s worker’s compensation dependency benefits for nearly three years after she died, according to an announcement by Attorney General Gurbir S. Grewal and the Office of the Insurance Fraud Prosecutor

Wanda Berry was indicted on charges of second-degree insurance fraud and third-degree theft by deception in an indictment handed up by a state grand jury in Trenton on Thursday.

Berry, whose mother died in November 2014, fraudulently claimed to New Jersey Manufacturers Insurance Group that her mother was alive in order to continue collecting the $1,400 monthly insurance benefit her mother had been receiving.

According to the indictment, in 2015 Berry falsely represented to NJM representatives that her mother was alive and living in a nursing home under a doctor’s care. In 2016 she falsely represented that her mother was alive in hospice care, and provided a fraudulent doctor’s note to support that false claim, according to the indictment.

The indictment is merely an accusation and the defendant is presumed innocent until proven guilty. Second-degree charges carry a sentence of five to 10 years in state prison and a fine of up to $150,000. Third-degree crimes carry a sentence of three to five years in state prison and a criminal fine of up to $15,000.

Deputy Attorney General Crystal Callahan presented the case to the grand jury. Detective Amy Carson coordinated the investigation. Acting Insurance Fraud Prosecutor Thompson thanked NJM for referring the matter to OIFP.