Why Bears Don’t Look for Honey In Hornets’ Nests
Ever wonder why the law enforcement seems more inclined to go after workers’ compensation fraudsters on the employer side rather than the employee side? Ever wonder why bears don’t look for honey in wasps nests? Be like the bear – follow the honey!
A recent story stumbled upon by your humble blogger tells the tale of John and Camille Applegate, owners of Hallmark Roofing, have reportedly sold their home to pay $200,000 to law enforcement officials as part of their restitution for several years of operating without workers’ compensation insurance and cheating their way out of paying taxes. This allowed them to underbid several of their competitors for various contracts.
When gubmn’t finds out that an employer illegally operates without insuring against its employees’ injuries, law enforcement officials are swift to act in investigating and prosecuting offenders. Must swifter, typically, than when an employee is defrauding the employer or the employer’s insurer. Fraud divisions of various law enforcement organizations actively go out seeking contractors offering to do jobs and then checking them for insurance. The efforts are considerably less energetic when it comes to catching employees engaged in fraud.
In fact, most insurers and self-insured employers have discovered that, unless the case is presented to the district attorney with a slam-dunk basket of evidence including surveillance, documentation, medical reports, and a tidy cover-letter drafted by a former investigator or deputy district attorney, making the case for the D.A.’s office, not much will get done.
The above-referenced story is why – once an employee cheats an employer out of compensation, that money is spent and gone. You can’t get back the damaged personal property or funds spent on personal services. You also can’t hope to recoup your cost of investigation. The D.A.s’ offices, well aware of the economics of the situation while busy tightening their belts against dwindling budgets, follow the honey and avoid the wasp stings – the employers have something to take.
So, the next time you are competing against a rival for a bid or a contract, bear in mind that their price might not account for (1) insurance premiums; or (2) investigation of insurance fraud. Yours does.