Unintentional Undercover Work Helps Close Texas Case

Texas Mutual Insurance Company reported that Dr. Catherine Delaney, a Ph.D. therapist from Houston, entered a corporate plea agreement (Delaney and Associates) with the Travis County District Attorney’s office related to charges of workers’ compensation insurance fraud. Dr. Delaney pleaded guilty on Jan. 20 and paid $9,652 in restitution to Texas Mutual Insurance Company.

The plea agreement followed a months-long joint investigation by the Travis County District Attorney office and Texas Mutual Insurance Company, including some unplanned surveillance work by Texas Mutual investigator Kathleen Kennedy.

In her spare time, Kennedy works as a volunteer with substance abusers in the Houston area. While attending an alcohol education seminar presented by the Houston Council on Alcohol and Drug Abuse, Kennedy noticed that Delaney was seated directly in front of her.

Delaney had filed for workers’ comp temporary income benefits (TIBs) when she claimed she was unable to work after allegedly injuring her left knee in her employer’s parking lot. She reportedly continued to collect TIBs even after going to work for another employer, Alief Independent School District, a few months later.

State law allows injured workers to receive TIBs only while they are unable to return to work. The law also requires injured workers to notify their workers’ comp carriers when they return to work.

Delaney reportedly failed to notify Texas Mutual Insurance Company that she had returned to work. She also is reported to have repeatedly told Texas Mutual staff that she was still unable to work so she could continue to receive TIBs of $508 per week.

Investigators call this sort of scam “double-dipping” because the claimant is getting paid by her employer for working and, in effect, getting paid by the insurance company for being too injured to work.

At the seminar, Kennedy reportedly observed that Delaney “moved freely and without obvious pain” and that her movements did not match the complaints of physical pain and restrictions she had told her health care providers. Kennedy contacted Assistant District Attorney Donna Crosby, who prosecuted the case on behalf of the Travis County District Attorney office.

The Delaney investigation was part of Texas Mutual Insurance Company’s “Zero Tolerance for Fraud” program. The company maintains three teams of investigators permanently assigned to investigate every report of suspected fraud.