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Thread Title: Fraud
Created On Monday July 07, 2003 9:47 AM

David.Teachout@Sharp.com
Junior Member

Posts: 2
Joined: Mar 2003

Monday July 07, 2003 9:47 AM

The effort to prosecute bona fide fraud cases is most encouraging. This should receive even greater support so that District Attorneys will be more aggressive in opting to prosecute fraud.
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ORIGINAL ARTICLE:

The California Department of Insurance has published a "most wanted" list on its website, targeting several individuals for workers' compensation fraud:

Thomas Spencer, a heavy equipment operator formerly residing in Redding, CA., alleged that he injured his neck while working at a construction site. He received both workers' compensation insurance benefits and State Disability Insurance benefits. The investigation revealed that Spencer was working as a heavy equipment operator for another employer while he was receiving benefits. He testified in his deposition that he was not working, and he failed to inform the Employment Development Department that he was working. On April 28, 1997, the Ventura County District Attorney's Office filed insurance fraud, State Disability insurance fraud and perjury on Spencer. A warrant for his arrest was issued with a bail amount of $5,000. On May 22, 1997, Spencer was arrested in Redding, California. He failed to appear for arraignment in Ventura, California, and a bench warrant for his arrest was issued with a bail amount of $5,000.

Efrain Ceballos, a migrant worker who resides in Mexico several months out of the year, filed a workers' compensation claim after he allegedly fell off an 18 foot ladder into the center of a tree while picking oranges. Ceballos complained of injury to his back, abdomen, head, lower extremities, groin area, right leg, and knee. Within thirty days, Ceballos was assaulted by an associate, and suffered injury to his right leg and ankle. Subsequently, Ceballos underwent open reduction and internal fixation of his right ankle. Thereafter, Ceballos claimed this injury as part of his original industrial injury to the point of denying involvement in an altercation and sustaining injuries, during a deposition. The warrant was issued on January 10, 1997. When in the U.S., Efrain stays with friends, coworkers and relatives, making him difficult to locate. Extradition is only approved within the United States, out of country extradition is not approved.

Melton Delaney, an inmate/laborer with the California Department of Corrections, filed a workers' compensation claim allegedly as a result of an industrial accident while incarcerated. Delaney was paid medical benefits totaling $5,156.14. Delaney's injury was the result of an altercation with another inmate.

Roberto Granados-Moreno, while working for Blackbeards Family Center as a gardener, filed an allegedly false workers' compensation claim that resulted in over $9,000 being paid out by T.I.G. Insurance Company. Granados-Moreno normally works as a laborer and is known to be a heavy drinker, according to the DOI Most Wanted site. Charges were filed in Fresno County for Insurance Fraud and Grand Theft and a warrant was issued on 7/24/96 for his arrest.

Gonzalo Rosales filed an allegedly false workers' compensation claim against Reuben's Restaurant where he worked as a busboy. Rosales continued to work as a busboy at another restaurant while he pursued his claim against Reuben's Restaurant. Traveler's Insurance Company has paid out over $23,000 in expenses on the claim. Charges of insurance fraud, Perjury and Grand Theft were filed on March 31, 1993, in Los Angeles County, and a warrant for his arrest was issued. The bail is $80,000.

Captured

Andrew Barrington filed an allegedly false workers' compensation claim for a lower back injury suffered while loading junk tires into a trailer during his employment. The criminal complaint says Barrington sustained the injury at home while moving a refrigerator.

According to the DOI, during fiscal year 2000/2001, the Fraud Division identified and reported 3,548 suspected fraudulent claims; assigned 476 new cases and made 170 arrests.

Source:WCC

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hybates@ca.rr.com
Junior Member

Posts: 12
Joined: Mar 2003

Wednesday July 09, 2003 4:44 PM

I don't know about you, but I think the results of the fraud fight here in California are pathetic. I've been visiting the "Most Wanted" web page for years and the same names have been there for years-they never get caught. (You'll note most of the warrants date back to the mid nineties!)

Other states like New York have hundreds of state fraud investigators, here we have probably a few dozen. Out of the tens of thousands of claims filed each year, they found 3,500 or so that they could act on, and out of those, arrested 170. How many of the 170 were convicted? How many cases were referred to them before they ID'd the 3500 cases that they should act on? You'll notice these statistics get conveniently left out...

Everyone in this industry knows who the regular abusers are, why aren't there sting operations to go after them like they do in New York?

(Maybe it's because they have lots of money to buy lobbyists in Sacramento?)

Does anyone agree with me that if the state would get serious about fighting fraud it might not be necessary to mess around with the comp laws again as they're planning to do again?

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stewshe@comcast.net
Senior Member

Posts: 1381
Joined: Jun 2002

Wednesday July 09, 2003 7:06 PM

hbates,

You posted in part as follows:

<<Other states like New York have hundreds of state fraud investigators, here we have probably a few dozen. Out of the tens of thousands of claims filed each year, they found 3,500 or so that they could act on, and out of those, arrested 170. How many of the 170 were convicted? How many cases were referred to them before they ID'd the 3500 cases that they should act on? You'll notice these statistics get conveniently left out... >>

The data is out there. I suggest you check it out. Since 1994 there have been multiple, intensive investigations of fraud in California and millions of dollars spent chasing it. Little was found, despite wild claims it was rampant in the streets!

The bottom line conclusion was that fraud was involved in perhaps 1% or less of all claims.

I might point out most applicant attorneys would support the arrest and conviction of truly fraudlent claimants.

Also, my wife, an adjuster for a major insurance company in this state, has reported several fraudlent claims and, with the assistance of an ex-FBI in house investigator, obtained in excess of 5 fraud convictions.

A lot of work is involved in presenting detailed documentation of evidence necessary to support the conviction. However, despite the gripes of many adjusters, few submit the documentation which a D.A. needs to proceed further.

How many have you reported? How many convictions have you obtained, given your knowledge of the extent of fraud in this state?

Now, having said that, in Fresno alone at a single insurance company two (or more) adusters/supervisors performed 10,000+ fraudlent acts in changing documentation in company records (back dating) to avoid audit penalties and to avoid having to pay L.C. Sec 4650(d) payments to injured workers who legally deserved them.

These acts alone constituted the majority of the fraud proven to exist in this state that year! (I suspect more fraudulent acts have been proven to exist against adjusters and employers than claimants...but that's another story!)

These persons went to jail. I wonder how many adjusters have performed fraudlent acts, justifying fraud convictions, such as these?

Before complaining about the system, investigate further. Consider how many convictions you have obtained, how many you have reported, how good your documentation was, and before throwing any rocks, consider how much glass your own house contains.

-------------------------
Stew (James T. Stewart) e-mail: stewshe@comcast.net
Author: Work Comp Index & Tables & Schedules in "The Labor Code Book," by LexisNexis/Matthew Bender.

7th ed. Work Comp Index (912 pgs), $119.00 ea; next ed. summer, 2010 {Discounts for orders of 12 or more}
Send check or money order & shipping info. (I cannot take credit cards.)

Prices INCLUDE sales tax, and shipping.

James T. Stewart; 1937 Santa Ana; Clovis, CA 93611

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hybates@ca.rr.com
Junior Member

Posts: 12
Joined: Mar 2003

Thursday July 10, 2003 9:58 AM

In the roughly 25 years I've been in this business, I've been involved in dozens of SIU investigations, and have seen about a half dozen that were prosecuted and convicted. Once involved a claims examiner who was ripping off our company, two involved employers who cheated on premiums. The rest involved claimants. I know the difference betweeen abuse and fraud, and I have personally reported dozens of suspected frauds year after year.

Occasionally, I get responses from the Fraud Bureau requesting a copy of the claim file. On one occasion I actually met with two state investigators who said they planned to prosecute but nothing ever happened, and they were non-responsive to several follow up calls.

Based on most of their recent press releases, it appears that the Fraud Bureau and the DA's responded to the criticism from the LA Times a while back and shifted their focus from investigating claimants and doctors to investigating employer fraud.

It's my understanding that the instances of Fraud in Fresno you cited were discovered by an OBAE audit, not the Fraud Bureau.

Given that the legislature is just now proposing some kind of cross referencing between EDD earnings records and the carriers to find cheaters illustrates what I mean, The other states have been doing this sort of routine checking for years, and many of the investigations and convictions reported on this web site started when information is developed that indicates a claimant is working while collecting TTD benefits.

You indicate that adjusters fail to get the necessary information to get convictions, but when one calls the Fraud Unit and requests assistance or information they tell you to submit a report, then reject the report because you don't have sufficient evidence-kind of a Catch 22 situation. Maybe if they had more staff, they could be more available to do training or provide assistance.
Anyways, I think I'm entitled to my opinion. I've been in the trenchs, I've tried to work the system, and so far, I'm not impressed.

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DKiss
Junior Member

Posts: 3
Joined: Feb 2004

Tuesday February 24, 2004 12:29 PM

Can fraud be pursued if a claim has resolved via compromise and release?

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davidd
Senior Member

Posts: 498
Joined: Jun 2002

Thursday February 26, 2004 2:08 PM

Yes - a C&R does not eliminate criminal culpability, and in fact, a C&R may be voided if it is determined that the settlement was procured using fraudulent means or was the product of fraud.

-------------------------
David DePaolo
President, Editor in Chief
www.workcompcentral.com

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jakelast@aol.com
Senior Member

Posts: 1024
Joined: Jun 2002

Thursday February 26, 2004 8:16 PM

In response to the question of fraud prosecution after a C & R, I agree with David that settlement of a case does not dispose of an issue of fraud. Keep in mind under a series of cases that even if fraud is demonstrated and a conviction follows, the bar only applies to the involved benefits. Therefore there may still be valid benefits to be provided that can be resolved with the settlement.

Jake Jacobsmeyer
Adelson, Testan, Brucno & Popalardo

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SophakWhat
Member

Posts: 39
Joined: May 2004

Saturday October 16, 2004 11:25 PM

I was reading some old threads and thought I'd rejuvinate some old topics to get a change of scenery going here. Fraud. The "F" word. Really, we all have a duty to make the time to see to it that genuine fraudulant activities are reported. If it's important enough to cpmplain & yammer about, then follow through & see it stopped.

Most of us (I hope!) would call the local authorities if we saw someone tagging up a house in our neighborhood, right? Cuz' it's important, it's illegal, it's in our neighborhood, and it's ugly. That's how I feel about fraud; because I despise the high cost of all types of insurance, I chose to become an Investigator who is willing to do the work. It's fairly simple to prove fraud when it actually exists. It's the quality of the "proof" that matters, the consistancy in the fraudulant activity.

I've worked for two Investigative companies, and honestly, they were awful. I got repremanded for being thorough and creative! I never broke any laws in my investigative efforts, just met office politics that ended up stiffleing my work.

If you're certain that fraud exists, see it through! Maybe hire an independant Investigator rather than the big guys. From my short term experience doing insurance surveillances, I'd say 3-4 of 10 claimants were exceptionally active.

It's out there.

-------------------------
Once upon a time, a workers' comp. claim was filed for all the right reasons, the AA called back, the CE did all the right stuff for the right reasons (and in a timely manner!) and the IW only took what was needed, felt better and RTW with a smile!

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scrapindee
Member

Posts: 88
Joined: Jan 2004

Sunday October 17, 2004 4:03 PM

SophaKingWhat:

Are you saying 30-40% of wc claims are fradulent? Please advise the source of your statistics.

IW don't need to be accused of commiting "fraud" when the IC and employer routinely deny claims, treatments, and reimbursements for months making "acute" injuries become "chronic". IWs have lost their homes, cars, and lifestyles...

Many IW have not been able to close their cases, get treatment or medications, or any movement since SB899 passed in April.

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SophakWhat
Member

Posts: 39
Joined: May 2004

Sunday October 17, 2004 7:16 PM

Scrap ~ Cool your jets! Please! Whoa! If you would have read my post in its entirety before jumping down my backside, you'd have noticed I was speaking from experience, MY experience. That's it. If you'll take a closer look, you'll see the glass is half full with 60% to 70% of MY surveillances being very long, boring, and uneventful days spent cooped up in a confined space with little to no venthilation, no bathroom & no observed activities that violate ones restrictions. So you see, I'm not capping on the IW, Scrap. I'm merely speaking from MY OWN personal experience as a Fraud Investigator. Statistically, 3-4 of 10 surveillances that I have worked ended up with no obvious indications of fraud. So, I hope that clarifies my statistical findings, as if statistics are really of much value!
For further info, Scrap, I experienced a WC CT while employed as an Investigator due to an employer that was not very nice, so I do understand IW's are not the only source of fraud. For further validation, I spent five years collecting for some of L.A.'s finest, most well disrespected WC medical facilities and can speak forever about scandalous "mills" & equally scandalous IC's. Yes, it's a big, round, circly-type circle, Scrap, which is why I choose to do something about it now. Besides, I always wanted to be a P.I. or a Lawyer, and since I missed my first day of Law School, well...you know.
So, in summary, my post merely represented my personal experiences; since my future client base will depend on the IC's and DA's of the insurance industry, I'd be an utter moron to dwell on the bad apples on their side of the fence now, wouldn't I!

Integrity is a personal choice. I don't like fraud because it's expensive to all socially responsible and healthy people since socially responsible and healthy people pay for things like car insurance, health insurance, E&O, etc. I don't go out and hunt down fraudulant IW's, nor do I encourage friends in the insurance industry to rule out fraud on every file! But when the red flags are running rampant in a CE's eyes, I will give them an 8mm tape if called upon. Any kind of fraud is bad. I just so happen to make a living at video taping it, or taping nothing (that's when there's no fraudulant stuff going on in public view).

Are you an IW? Do you work in the industry? Just curious.

Melanie

-------------------------
Once upon a time, a workers' comp. claim was filed for all the right reasons, the AA called back, the CE did all the right stuff for the right reasons (and in a timely manner!) and the IW only took what was needed, felt better and RTW with a smile!

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scrapindee
Member

Posts: 88
Joined: Jan 2004

Monday October 18, 2004 7:53 AM

Melonie,

I know that you wanted to heat up the board -- but there has just been way too much bashing lately on the injured workers. One has to be careful, I've learned, even when expressing one's own experiences -- having worked in personnel management for several large insurance companies, I've seen statistics utilized to manipulate agents, brokers, managers and staff. If you think about it, if your assignment was to catch the fraudulent behavior -- your numbers were actually low -- one would expect 80 to 90% of your caseload-- unless everyone was under suspicion. That was my point.

Television and the movies want to make surveillance an exciting and glamorous assignment. Since in actuality, very few injured workers commit fraud, it can make for a very slow assignment.

Everyone appears to be doing just their job, but I certainly haven't seen much forward progress since April 2004.

I don't like fraud either -- one bad Apple does spoil the barrel be it injured workers, claims examiners, or attorneys. My opinion is anyone who manipulates the system is committing fraud.

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SophakWhat
Member

Posts: 39
Joined: May 2004

Thursday December 30, 2004 2:25 AM

Scrap ~ No, heating up the board was not my intent. For clarification purposes, the job of an insurance fraud investigator is not, as you put it, "...to catch the fraudulant behavior..." The duties of the insurance fraud investigator is to document and videotape all activities engaged in by the subject of the surveillance, keep the CE up to date according to the CE's schedule, prepare a well written, thorough, unbiassed surveillance report and see to it that the CE gets it when they want it with media that is clear, not shaky or blurred. Period.

For an investigator to involve themselves in a claim so deeply that they view their job as that of one who will "...catch the fraudulant behavior..." is a mistake in my opinion. My job is to videotape the activities of the individual and report to the CE who hired me. I believe the CE's, DA's, WCJ's and District Attorneys are the folk's who determine what constitutes "...fraudulant behaviors..." Now, that doesn't mean I don't form opinions based upon what I see, of course I do! I've seen some incredibly active people who were supposedly 100% disabled, 100% of the time, doing incredibly strenuous things like chopping down all the trees in ones yard, tossing tree stumps, building huge ponds and tossing large boulders, birthing farm animals, etc.!!! Of course I thought they were full of BS, but I keep my opinions to myself and give the client what they specifically ask for.

I also disagree with your notion that my #'s were low, no, my #'s were an approximation of what I've seen in my new career as an Investigator. I believe that most CE's seek the services of an investigator when they are either unsure of a hunch that someones milking it, or they are certain someone's milking it and simply need the lawfully acquired proof that a good investigator can obtain. Just refrain from inclusion of opinions in the report to maintain the integrity of the surveillance.

Maybe you might make a good investigator, go for it! Now, be prepared for the not so pleasant side effects that come with the job like the professional claimant who spots you and then chases you down if they can catch you, don't be afraid to park on streets like 18th Street in Los Angeles and conduct an 8 hour surveillance from inside your pretty car (likely the only pretty car on the block), be prepared to explain your presence when confronted and be sure to know the streets on each assignment. I'll tell you this, it definitely beats pushing paper from 8 to 5, Monday thru Friday in my opinion! Pays decent, too! Good Luck!

Melanie
PI 24261

-------------------------
Once upon a time, a workers' comp. claim was filed for all the right reasons, the AA called back, the CE did all the right stuff for the right reasons (and in a timely manner!) and the IW only took what was needed, felt better and RTW with a smile!

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scrapindee
Member

Posts: 88
Joined: Jan 2004

Thursday December 30, 2004 1:15 PM

Hi Melanie,

Thank you for the great clarification-- you certainly cleared up a lot of misconceptions.

My employer, the largest in the area is self-insured. The employer uses in-house fraud investigators -- I don't know if they are licensed -- they probably are -- to catch fraudulent behavior. It is well-known that if you file a claim, you will have someone videotaping you sooner if not later. You can generally assume you will be videotaped around the time of the P&S report, a QME, an AME, a deposition. I knows some injured workers, from this employer, that would tell you the investigators are there day in day out, spending thousands of dollars with little to show for it.

That being said now that I understand more what your purpose is, I apologize for saying your numbers were low.

Okay so tell me what it takes to become a good investigator. Do you have to be a police officer first? What kind of training (OJT?) do you get? Do you serve an internship or apprenticeship? How physical is the job? (Do you ever get to go the bathroom?)

I saw you posted some questions on the Injured Worker Board-- good resource.

Edited: Thursday December 30, 2004 at 1:25 PM by scrapindee

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SophakWhat
Member

Posts: 39
Joined: May 2004

Thursday December 30, 2004 7:12 PM

Scrap ~ I am glad we have cleared up our miscommunications! Thanks for the response.

In reply to your questions, honestly, I believe a "good investigator" is one who supplies the client with the facts that are needed in order to clarify something. A "good investigator" would conduct business in a way that he/she could testify under penalty of perjury on any given case without perjureing him/herself. That's imperative.
As far as using the facilities, well, in my short experience, both companies I worked for made it clear that we needed to be prepared for anything and that leaving a surveillance site for any reason was unacceptable. It's that three minute period of time that you split to the nearest McD's or wherever the nearest restroom is, you can count on that's the same moment that the claimant walks out carrying a safe on their head (or whatever) and that car that's been in your video all day drives off and you get back and have no idea who took off in it. How's that going to go over? Not good. Not good at all.
As far as training goes, it depends on what the investigative firms want. There are a lot of retired law enforcement officers and retired government officials that fall back on this work because they're experienced in this line of work.
Personally, I believe being a woman in this industry has its advantages. For example, how many people would notice some man sitting in a car on our street and start to wonder what he's up to? More of us would likely take notice of him and feel uneasy in no time. However, same scenario with a woman in that car, far less intimidating and minimal threat posed by a woman being present. So it has its advantages in that respect!
It's a lot of hours and requires patience and planning, but it's a rewarding job, too. You ought to look into it. Maybe you're cut out for the work of an investigator!
For info. on licensing, check out http://www.dca.ca.gov/bsis/

Happy New Year!
Melanie
PI 24261

-------------------------
Once upon a time, a workers' comp. claim was filed for all the right reasons, the AA called back, the CE did all the right stuff for the right reasons (and in a timely manner!) and the IW only took what was needed, felt better and RTW with a smile!

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Franny
Junior Member

Posts: 2
Joined: Apr 2005

Wednesday April 06, 2005 7:12 PM

Here is your latest scam in Texas..my god where does it end!?

This is truly the latest scam in Diagnostic Imaging. The trick is to first get an order from an "onboard" physician. Have the order reflect a normal C-spine, then add, flexion, then extension. The Imaging center then bills and reports on each view as though it is a separate study..One study presented as.three studies Three reports one MRI, in fact not even a high field MRI. Here is the kicker...the adjustment for the flexion and extension take moments to position and minutes to perform. The patient never leaves the table and the protocols are preset by Fonar. The scam is now being billed out of network and being tossed at Texas Workers Compensation. Bills for this simple MRI can reach $10,000.00 for a normal, routing spine scan with a couple of adjustments and slices. Someone needs to look at a close look at this one!! Scams include ClearLake Standup, McAllen Texas Standup Fonar and the Natural MRI in Houston, at Advanced Diagnostics. The letters that reach TWC after rejection often tout the Standup MRI and so different that it warrants ripping of fpatients, workers and the State of Texas. Out of Network charges for WC and insurance companies are absolutely fraud. This is a low power .6 Tesla Magnet with a few gimmicks
and the very latest fraud on Texas Employers, TWC, Managed Care and individual patients.

-------------------------
Fraud is rampant in Diagnostic Imaging

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Hammer
Senior Member

Posts: 750
Joined: Apr 2004

Thursday April 07, 2005 6:04 AM

Hello Franny:

Welcome to the world of WC.
The MRI companies must have left CA & went to Tx.
Contact Arnies buddy, Bush as I am sure he has some connections in Tx.

Joe- NO.1

-------------------------
wcpilaw@yahoo.com -

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Glegalwc@yahoo.com
Junior Member

Posts: 13
Joined: Jun 2002

Saturday May 28, 2005 12:32 PM

Califoria should take an example from NY in "reform" instead of gutting beneifts. Injured Workers after injury should file a civil cause of action in lieu of Workers Compensation - Fraud and Misreptesentation would be the main cause of action as per LC 4154 and the work force not being advised of their rights. More money - same burden of proof - and above all quality medical care in the civil arena it looks like would make a big unwritten "reform" with alot of publicity and some heft judgments. Just a thought.

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