Archive for the ‘Fraud’ Category

Job Title: File Clerk – Duties Include Heavy Construction, Dangerous Physical Labor, and Some Fraud

June 7th, 2012 1 comment

Every business looks for ways to cut expenses – and workers’ compensation insurance is no exception.  So what’s a better way of saving a few dollars than by reporting your roofers as marketers, your truck drivers as mail clerks, and your construction workers as data entry specialists?

And what do we call such efforts?  Resourcefulness? Creativity? Perhaps even efficiency?  The San Bernardino County District Attorney’s Office calls it fraud, and has charged two business owners with felony insurance fraud because of these very efforts, in what appears to be a case of employer-broker collusion to rip off an insurance company.

Sadly, the complaint is a little light on the details, so we can only imagine what the defendants’ are charged with and just how creative they were in (allegedly) stretching the truth as to what their employees actually did.

WCDefenseCA sends its salute to First Comp Insurance for detecting this possible fraud and making sure a case made its way to the DA’s office.  Most times, it is the insurer or self-insured employer that provides the eyes and ears laying the foundation for a fraud case.

Categories: Fraud, News Tags:

Facebook Used to Catch Workers’ Compensation Fraudster

May 10th, 2012 No comments

Facebook.  In days like these, we cannot afford to brush it off as just a venue for attention-seekers to document every meaningless aspect of their lives for the world to see.  It is also a great resource for catching fraudsters and plugging workers’ compensation leaks.

There are sophisticated methods of using Facebook to catch injured workers exceeding their “physical limitations.”  For example, you might catch a TTD applicant posting pictures of himself playing basketball, or that spinal injury case might be uploading video of herself doing tricks on a jet-ski.  But sometimes the lies are even more glaring.

Kristi Denise Motty was convicted for workers’ compensation fraud following a two-day trial.  For this case, the deputy district attorney stepped back from the trees and showed the jury the forest – it didn’t matter what Ms. Motty was posting on Facebook; she didn’t need to discuss mountain climbing or bear-wrestling.

While Motty was off work, she entered nearly 200 updates on her Facebook account, even though “it was impossible to write or type” and her pain from doing so was “excruciating.”  Motty worked as an office technician at Corcoran’s California Substance Abuse Treatment.

Motty was also photographed loading textbooks into her car, attending nursing school classes, taking out the trash, texting on her phone, and carrying heavy grocery bags.

WCDefenseCA sends its congratulations to the Tulare County District Attorney’s Office for a job well done!

Categories: Fraud, News Tags:

3 Generations of Family Arrested – Fraud Doesn’t Pay!

Your humble blogger, in the years of his youth, once read a story about a Japanese swordsmith, the twenty-seventh in his line.  Each generation, from the first all the way to his, had mastered the art of sword-making, learned secrets and new methods, and closely held those secrets within the family to consistently make excellent swords.  I marveled at the competence and skill that must have come with so long a line of craftsmen.  Of course, not all skills improve as they are passed from generation to generation.

Three generations of a family in San Bernardino County have been charged with various fraud crimes after the death of a worker in 2008.  State Compensation Insurance Fund noticed that the family’s company had been under-reporting and misclassifying employee information and payroll.

The District Attorney Investigator’s unit obtained search warrants and arrested a Husband-Wife-Daughter team, charging them with 11 felony counts of insurance code violations.  This investigation led to additional discoveries, including crimes committed by the son and grandmother, including Grand Theft and Conspiracy.  After all the family that steals together, appeals together.

WCDefenseCA congratulates Senior Investigator Hank Jun on an excellent investigation and wishes the best of luck to Deputy District Attorney Scott Byrd in prosecuting the case.

Categories: Fraud Tags:

Received Bills from Implantium? Fraud Charges Pending…

April 30th, 2012 No comments

Have you seen bills for Implantium?  Well, if you have, you may want to hold off before you pay them.  The Santa Clara County District Attorney’s Office has charged Trudy Maurer (CEO) and Tigran Shahsuvarya (Medical Director) with nine felony counts of fraud, the allegations being that the two inflated invoices and submitted them to various government employers in San Jose County.

Shrugging off the medical fee schedule, Implantium allegedly overbilled the government employers for devices implanted (or supposed to be implanted) into injured employees backs.

If your gamble-inclined blogger were inclined to gamble, he would guess that these were more of those spinal stimulators or neural stimulators that work so well during the “trial” phase and then stop working all together after being implanted, requiring additional surgery to remove them.

If these allegations are true, hopefully the District Attorney’s office will not hesitate to throw the proverbial book at the perpetrators.  These parasitic acts bankrupt the workers’ compensation system and hurt tax-payers, employers, and employees alike.

One can also hope that the DA’s office will not hesitate to pursue the same sort of transgressions when committed against private-sector employers and insurers.

As always, WCDefenseCA wishes the District Attorney’s office good hunting!

Categories: Fraud, Liens, News Tags:

Lien “Expert” Charged with 16 Counts of Perjury

April 26th, 2012 No comments

The reach and influence of your humble (and arguably delusional) blogger spans far and wide.  Reliable sources have pointed out a fraud story that is simply ridiculous.  On January 5, 2012 the San Diego District Attorney’s Office filed a felony complaint, alleging sixteen counts of perjury against Joseph Arthur Wolf.  Wolf, who on at least one occasion testified as an “expert witness” in a lien recovery matter for workers’ compensation cases, made claims that he had received degrees from universities (which he apparently had not), and that he had been mayor of a town in New Jersey (which he apparently had not either).

Among his other claimed titles were: Police Commissioner (of two different towns in two different states), President of the Board of Health, and Assemblyman.  He also claimed to have taught medical doctors at Chicago University Pritzger School of Medicine.

Also of interest is Count 2: “[d]efendant stated he had no financial interest in the outcome of the hearing, but was being paid by the surgery center.”

According to the complaint, Wolf was testifying for Wolf & Associates when these 16 acts of perjury occurred.  But the Wolf & Associates website makes no mention of Joseph Arthur Wolf, but only of Leslie Wolf and her “20+ years experience in the medical and workers [sic] compensation fields.”

Efforts to retrieve cached versions of the Wolf & Associates website, ones that would include some mention of Joseph Arthur Wolf, were unsuccessful.  In any case, it appears that Wolf & Associates provided lien recovery services to various lien claimants, and, on at least one occasion, offered Joseph Arthur Wolf as an expert witness to carry the requisite burden of proof as to necessity and/or reasonableness of charges.

The defense attorney in that case must have been as diligent as they come – he rooted out the patent fraud and perjury committed by this so-called “expert” and the District Attorney is now involved.  How many other lien-recovery outfits try these sort of shenanigans?  How many times have the succeeded in influencing workers’ compensation Judges to award undeserved funds to lien claimants?

As a member of the defense community, I would also like an investigation into Wolf & Associates – did they know about his background? How often have they retained Mr. Wolf as an expert witness?  Are the facts there to support a charge of conspiracy to commit perjury?  California in general and Southern California in particular are plagued by the devastating effect of liens – when applicants are wondering where all the money is going, they can find the lien claimants siphoning off the defendant’s reserves and litigation budget.  This is an example of the problem.

WCDefenseCA sends a very sincere “good hunting” to the San Diego District Attorney’s Office.

Categories: Fraud, News Tags:

Applicant’s Attorney Sanctioned $1,000 for False Statements

April 23rd, 2012 2 comments

Sanctions.  Sanctions, sanctions, sanctions.  They make the news when they happen, and the defense community involuntarily pumps a fist in support when the Workers’ Compensation Appeals Board imposes sanctions against lien claimants or applicants’ attorneys who play fast and loose with the truth.

Not too long ago, the WCAB imposed sanctions against a Valencia applicants’ lawyer for some less-than-honest statements pertaining to the timeliness of his filed petition.  In keeping with WCDefenseCA’s policy of not naming names, your humble blogger will decline to broadcast the perpetrator’s identity.  But if you e-mail me (, I will send you the panel opinion.

Applicant’s attorney filed a petition for reconsideration on June 28, 2011 even though the underlying Joint Findings and Award was issued January 25, 2011.  To deal with the issue of timeliness (for a discussion of reconsideration and removal, please click here) applicant’s attorney alleged that he never received the F&A when it was served.  But this means that he had 20 days from the date of receipt to file a petition for reconsideration – and the question arose as to when he actually received the F&A.

In answering applicant’s petition for reconsideration of June 28, defense counsel raised the argument that the petition was not timely.  Furthermore, evidence was offered that applicant had the F&A in his hands at an Mandatory Settlement Conference on May 2, 2011.  Your humble blogger may be mathematically impaired, but with the use of his fingers and toes he discovered that June 28 is more than twenty days after May 2nd.

Well, the WCAB ordered an investigation on the trial level into this issue and the question of ex parte communication with a judge and making misleading statements to a judge.  The defense attorney appeared at the hearing to testify, but applicant’s attorney did not.  He later alleged that he calendared the hearing incorrectly (labeling the hearing as 1:00 instead of 8:30) and that the whole thing is moot anyways because “the Fifth amended [sic]” protects him from testifying against himself.

The WCAB was not impressed.

Sanctions of $1,000 were imposed on the applicant’s attorney for the misleading claims regarding when the attorney actually had the F&A.  Because no evidence was offered with respect to the issues of ex parte communication and false statements to a workers’ compensation Judge, sanctions were not imposed for those as well (the applicant’s attorney escaped an additional $2,000 in sanctions).  With respect to the claim of the “Fifth amended,” the WCAB noted that there were no criminal charges pending, so the defense did not apply.

Your curious blogger can’t help but wonder – has this attorney ever claimed to “not have received” some crucial document in the past?  This time he was caught red-handed because a competent defense attorney was able to catch him; perhaps there have been cases where no one remembered or was willing to testify?

So, what lessons can we learn from this story?  Well, for starters, keep a keen eye on your calendar and make sure you don’t miss the chance to testify in your own defense.  Keep an eye on the dates involved – the defense attorney in this case was able to keep the rules and deadlines from being bent out of shape through diligence and a properly drafted answer.

Categories: Fraud, Sanctions Tags:

Sacramento CHP Officer Arrested for Fraud

April 19th, 2012 2 comments

Workers’ compensation fraud is always frustrating – and for good reason.  Not only does it make you realize that you have just wasted a fortune in undeserved benefits and unrecoverable investigation and prosecution costs, but it makes you a habitual cynic, mistrustful of seemingly honest and unfortunate injured workers.

This is especially the case when the act is committed by someone in a position of trust.  Firefighters are a good examplePolicemen are another.  But even the state capitol and its guardians are not immune to the corrupting influence of fraud.

Officer Tony Yao, a California Highway Patrol officer in Sacramento has been charged with felony workers’ compensation fraud.  As alleged, Yao claimed he had a back injury during firearms training while at the Academy, and then claimed his back pain was so severe he could not even do the office work offered to him.  An internal investigation revealed unreported past back injuries, completely unused exercise equipment (perhaps the result of a typical new years’ resolution?)

Given that some public employees such as law enforcement and firefighters tend to receive various beneficial presumptions in workers’ compensation, shouldn’t there be some additional penalties for when they commit acts of fraud?  Perhaps a reader more familiar than your focused blogger could comment as to this.

But if reforms are really in the air for the workers’ compensation system, perhaps additional penalties can be drafted into legislation and regulations to be imposed on the fraudsters who breach the public trust.

Categories: Fraud Tags:

Firefighter, Fighter, Fraudster

April 17th, 2012 No comments

My dear readers,

Some of you may not realize how absolutely dedicated your humble blogger is to your continued entertainment and, to a possibly equal extent, to keeping you up to date on all the happenings of the workers’ compensation world.  Not only do I suffer the verbal abuse of applicants, their attorneys, lien claimants, and judges in defending the endless onslaught of claims… I am also willing to suffer the physical abuse that will no doubt follow this post.

A Los Angeles City firefighter was arrested recently for allegedly filing false workers’ compensation insurance claims.  After claiming he was unable to do his job as a firefighter, he continued to compete in various mixed martial arts events, winning a good number of them.  In fact, on March 7, he tweeted “[j]ust finished running 2.5 miles in 16:44 min.”

This is one of the more blatant examples of fraud in our system, but such stories are both good and bad for the industry.  On the bright side, the story highlights that fraud does happen; that it happens amongst some of the more highly regarded and respected members of the community (including police and firefighters); and that some people are just plain cheaters.

But such stories also have a negative effect.  They take away from the fact that most fraud isn’t this high-profile or blatant.  Most fraud includes subtle theft – claiming an injury prior to retirement; sitting at home instead of working while collecting disability checks; claiming a recovery from an injury to return to work, only to cause oneself greater impairment.

In this case, the fraudster (who is probably on his way over here to beat me up right now) screamed his deceit from the mountaintops – most of the parasites unlawfully draining the resources of California’s employers, insurers, and government entities are not so easily caught, nor their apprehension so widely broadcast.

Categories: Fraud, News Tags:

Concealing Car Accident Injury Leads to Felony Conviction for Fired Employee

April 5th, 2012 No comments

Workers’ compensation insurance is just that – insurance meant to provide speedy and practical assistance to workers injured while on the job.  It is not insurance against car accidents or a tool to get back at your boss.  For Yadder Espinosa, of Ventura County, this is somewhat of a rude awakening.

WCDefenseCA doesn’t normally name names, but when workers’ compensation fraudsters finally get the conviction (criminal, not moral) that they earned, your righteous blogger has no hesitation in saving potential-future employers of such criminals from making a hiring mistake.

The basic story is as follows:  Mr. Espinosa gets into a non-industrial vehicle collision and begins treating various body parts.  Some time latter, he is fired from his job and marched off the premises.  He then returns, allegedly to recover some personal items, before stepping on an imaginary banana peel and “falling.”  Refusing medical treatment, he then drives himself to the hospital and claims injury to the same body parts affected by the vehicle collision.

Throughout the claim, while receiving $40,000 thanks to his fraud, Mr. Espinosa didn’t disclose the vehicle collision or even the fact that he was receiving treatment for the injury.

District Attorney Gregory D. Totten is to be credited with securing a felony guilty plea to a violation of Insurance Code section 1871.4.  Mr. Totten intends to seek full restitution of the $40,000 wrongfully obtained by Mr. Espinosa.  In all likelihood, however, the money has been spent, in whole or in part, and there are no funds from which to reimburse the District Attorney’s office for its time, much less the costs incurred by the employer – think of the swarm of liens, the fee-hungry applicant’s attorney, and, of course, the cost of the defense.  The damage is done and defendant will probably never be made whole.

Such is the danger of allowing fraud to go unnoticed, unchecked, unpunished, or undeterred – the employer and the district attorney’s office are to be commended for holding the line in this case and setting an example for the rest of the workers’ compensation community.

Categories: Fraud Tags:

Court of Appeal – Defendant Insurer for Stolen Checks

March 23rd, 2012 No comments

The Court of Appeal issued its opinion in the case of Barrett Business Services, Inc. v. Workers’ Compensation Appeals Board.  Generally, when there is some sort of authority in workers’ compensation, the applicants’ attorneys and defense lawyers perk our legal ears up and pay attention.  After all, this is a fairly rare thing.

But this case was an example of three levels of missing a point – the workers’ compensation Judge, the Workers’ Compensation Appeals Board, and the Court of Appeal all missed something – the unequal treatment of applicants and defendants.

To summarize the case – applicant filed a claim for various injuries sustained while employed by Barrett Business Services, Inc. and he moved several times during the life of the case.  When the matter came to settlement by way of compromise and release, the defense sent to applicant’s attorney the settlement documents for review having placed an old address on the form.

The applicant’s attorney, after supposedly reviewing the documents, signed for applicant in accordance with the power of attorney granted to him, and walked the documents through.  Defendant sent applicant’s attorney a check for $3,000, and to applicant’s old address sent a check for $17,000.  Someone else found and cashed the check with a cash-checking service while pretending (apparently applicant’s cousin was living at his old address).

Applicant complained that he never got his money – and now the question arises: who is responsible for the $17,000?

Relying on the uniform commercial code, the Court of Appeal affirmed the WCJ and the WCAB in finding that defendant must re-issue a check for $17,000 and seek a remedy from the cash-checking service that allowed the money to be pilfered.

Now, your frustrated blogger understands the position that defendant is not blameless – sure, the wrong address was used and defendant had notice of applicant’s new address.  But applicant’s attorney was on notice too – after all, it is only because applicant’s attorney noticed the new address to defendant that defendant was on notice.

In other words, there were mistakes made on both sides, but it is only defendant that bears the cost of these mistakes.  It was applicant’s attorney’s job to make sure the documents were correct before signing them, and yet he gets to keep his $3,000.

The proper course of action in this case would have been to order the applicant’s attorney to send applicant a check for $3,000.  Then applicant can enjoy a $14,000 check from the defense and a $3,000 check from his attorney.  Now, applicant’s attorney can join the defense in seeking compensation from the check-cashing service.

There was a mistake made by both sides in this case, and for some reason the defense must again bear all the costs.

Categories: Fraud Tags: