Washington Fraud: Plumber’s Work Comp Scam, Woman’s Bogus Theft Claims

An Auburn, Wash., plumber who lied about working while he was receiving disability payments has been sentenced to serve 45 days in detention.

Bobby Eugene Stepp, 66, claimed he wasn’t working due to an on-the-job injury, while he was actually running his own plumbing business that took in more than $144,000 during that time.

King County Superior Court Judge Theresa Doyle ordered the sentence last week for Stepp, and allowed him to serve the time in electronic home monitoring. A hearing about repaying the wrongfully obtained benefits is scheduled for June 8.

Stepp pleaded guilty last month to felony, first-degree theft in the incident. The Washington Attorney General’s Office prosecuted the case based on a Washington State Department of Labor & Industries (L&I) investigation.

Stepp lost his right leg due to a workplace accident in 2004. As a result, he received medical benefits and wage-replacement payments off and on until early 2015.

L&I began investigating in 2015 after a routine cross-match of Employment Security Department and L&I records showed Stepp was earning wages.

It turned out that in 2014, he worked first as a plumber for two companies and then operated his own plumbing business installing bathtubs, charging papers said. The company earned more than $144,000 from June through December that year, according to his bookkeeper’s records.

During the same period, he received more than $29,000 in L&I wage-replacement payments. To qualify for the payments, Stepp signed official forms stating that he could not work, and was not working, because of his injury.

L&I administers the state workers’ compensation system, which helps injured employees heal and return to work. The department provides medical and vocational services, and, in some cases, a portion of injured workers’ wages if they can’t work due to their workplace injury or can’t do the same job.

Taylor Morgado (formerly Lawson), of Buckley, Wash., pleaded not guilty in King County Superior Court to one count of first-degree theft and one count of filing a fraudulent insurance claim totaling nearly $27,000. The felony charges were filed after an investigation by Insurance Commissioner Mike Kreidler’s Criminal Investigations Unit (CIU).

According to the investigation, Morgado filed two false claims with Safeco Insurance.

In April 2015, she filed a renter’s insurance claim after she reported a burglary at her Auburn residence. The claim included electronics, jewelry, cash and a 2-carat diamond wedding ring set that she said had been appraised at $4,995. Safeco paid her $6,424 for the entire claim; her policy was capped at $3,000 for jewelry and the rest paid for the replacement of electronic items.

In December 2016, the ring was listed for sale on Morgado’s OfferUp account with an asking price of $3,800. Morgado told Kreidler’s detectives that she had found the ring after she filed the claim, but she didn’t know if she should tell Safeco that she had found it. She turned in the ring during the investigation.

In May 2015, Morgado filed a stolen vehicle claim for her 2013 Nissan Juke. Morgado reported to Auburn police that the vehicle was stolen from her residence in the middle of the night. She told police that the spare key to the Nissan had been stolen in the burglary the previous month. Safeco paid $20,240 to the lienholder and $550 in rental car expenses for Morgado.

In January 2017, the car was recovered by Washington State Patrol when a man was arrested in the Nissan for driving under the influence. Police checked the car’s license plates and found they were registered to a different car owned by a friend of Morgado’s. Morgado later told Kreidler’s detectives that she had given the car to her friend before she reported it stolen.