Workers’ comp insurance fraud is a serious offense in Georgia and throughout the country. Unfortunately, it happens more often than you might think, resulting in millions of dollars lost from insurance companies and taxpayers alike.
Atlanta business owners sentenced in workers’ comp fraud scheme
One such situation occurred a few years ago when 2 Atlanta business owners were arrested on charges of a workers’ compensation Ponzi scheme. Wesley Owens and Beau Wilson of Georgia were taken into custody, along with an accomplice, Jennifer Lynn Ceville James, of Tampa, Florida, after targeting California farm workers in a $120 million fraud scam.
Owens owned 3 different businesses that he used to defraud the California Department of Insurance. Investigators spent 2 years working on the case and stated that while farm workers fell victim to the scheme, taxpayers in both Georgia and California were also defrauded. Owens paid money to himself after obtaining fraudulent insurance certificates when workers filed workers’ compensation claims.
In total, the suspects faced 88 counts of insurance fraud, identity fraud, felony theft and racketeering.
When the case went to trial, Owens and Wilson both pleaded no contest to the multiple counts of fraud amounting to $54 million in a workers’ compensation scheme. The 2 men received 10 years of probation and 60 days of community labor and were ordered to pay $350,000 in cash in restitution before receiving final sentencing.
Additionally, both men agreed to pay back $14.15 million toward restitution during their decade of probation. According to the stipulation of their probation, a violation would result in 5 years in California State Prison.
Fighting fraud in the workers’ compensation system
Fraud that takes place in the workers’ compensation system is most commonly perpetrated by individuals or businesses who fail to obtain workers’ compensation insurance.
Common types of workers’ comp fraud by employees and employers
Workers’ compensation fraud is just like any other type of fraud scheme: It involves deliberate deception for one’s own financial gain. Both employees and employers can perpetrate this crime.
Employee workers’ comp fraud
The following are some ways that employees can commit workers’ compensation fraud:
- Exaggerating or faking a job-related injury or illness
- Working at another job while out on workers’ compensation and not reporting income
- Making false claims about an accident or injury that never happened
- Claiming workers’ compensation for an injury that is not job-related
- Lying about a pre-existing condition
- Intentionally harming oneself to claim that a job-related injury occurred to gain workers’ comp benefits
- Claiming one received medical treatment and falsifying medical expenses
Employer workers’ comp fraud
Workers’ comp fraud perpetrated by employers is far more common than employee workers’ comp fraud. Employers can commit workers’ compensation fraud by doing any of the following:
- Misclassifying workers. One of the most common ways employers commit workers’ comp fraud is to deliberately misclassify regular employees as independent contractors or freelancers to avoid paying workers’ compensation benefits if they suffer on-the-job injuries or illnesses.
- Retaliating after a workers’ comp claim. If a worker is legitimately injured and files a workers’ compensation claim but is terminated because of it, the employer has simultaneously broken the law and committed fraud.
- Falsifying employee numbers. Employers can commit workers’ comp fraud by misrepresenting the number of employees they have to their insurer in order to lower their premiums.
- Lying about safety measures. Employers cannot claim to have a workplace safety program when they have no such protocols in place.
- Failing to purchase required insurance. Not carrying workers’ compensation when it’s required is also considered fraud.
Georgia workers’ compensation fraud & insurance bad faith
How to know when an insurer is acting in bad faith by denying workers’ comp benefits, or if an employer lied to an insurance company about an injured workers’ claim.
What employee actions might make an employer question the legitimacy of their claim?
Some actions by employees can make employers question whether they have legitimate workers’ compensation claims, including:
- Refusing to get medical treatment or provide documentation of their injuries
- Failing to immediately report the injury or illness
- Having a history of filing workers’ compensation claims
- Having an inconsistent story about their work-related accident
- Reporting an injury that doesn’t seem consistent with the employee’s job duties
- Having a history of disciplinary issues
Steps employers can take to prevent workers’ compensation fraud
Employers can take certain steps to prevent workers’ compensation fraud from happening. They include the following:
- Maintain a safe workplace and institute an injury prevention policy
- Educate employees about their workers’ compensation rights and responsibilities
- Establish procedures for reporting work accidents
- Investigate all work-related injuries or illnesses
- Show a strong stance against fraud
- Use caution when terminating employees
- Maintain contact with employees receiving workers’ compensation benefits
- Refer suspicious claims to insurance carriers
Contact a Georgia workers’ compensation attorney
Workers’ compensation fraud is a serious crime that harms both employers and legitimately injured workers, so it’s crucial that both parties understand their rights and responsibilities when it comes to workers’ compensation claims.
If you’re an injured worker, don’t let the fear of being accused of fraud stop you from filing a legitimate claim. Seek assistance from an experienced workers’ compensation attorney who can guide you through the process and protect your rights.
If you live in Atlanta and have any questions or concerns about workers’ compensation or you just need help filing a claim, contact Gerber & Holder Workers’ Compensation Attorneys today. Our attorneys have over 75 years of combined experience helping injured workers across Georgia recover the compensation they deserve.