6 Key Workers’ Compensation Fraud Cases to Know

Some workers’ compensation fraud takes place on the side of the employer, while other cases place fraudulent claim-filing workers at fault. Regardless of which party is in the wrong, everyone can benefit from becoming familiar with common forms of workers’ compensation fraud. Employers can learn to recognize red flags and avoid making mistakes that may be interpreted as fraudulent, while employees can educate themselves about their rights.

These six well-known workers’ compensation fraud cases can provide you with a point of reference for what incidents are most common in the world of workers’ compensation.

1. California Hospital and Surgeons Allegedly Overbilled by $580 Million: Referred to as a “kickback” scheme, the doctors involved were receiving huge amounts of money to send patients to two particular hospitals in Southern California when in need of spinal surgeries. Five medical professionals were charged in relation to the scheme, which is believed to have operated for nearly a decade before it was discovered. The patients being referred had no idea that their doctors were receiving as much as $100,000 per referral, nor did they know that the hospital was overbilling insurance and workers’ compensation to recoup those payouts.

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2. Ex Washington State Corrections Officer Investigated for $100,000 of Alleged Disability Payment Fraud: A former corrections officer at the Monroe Correctional Complex faces felony charges after surveillance discovered he was exercising while receiving $100,000 in workers’ compensation disability payments over a 5-year span. Contrary to his statements claiming he couldn’t work after an on-the-job injury, he was also found driving to a second full-time job as a security worker.

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3. Home Improvement Company Allegedly Called Installers “Independent Contractors” to Avoid Paying into Workers’ Compensation: Lowe’s is one big name company that allegedly engaged in this practice. By referring to employees as independent contractors, Lowe’s avoided paying them employee benefits, as well as avoided paying the employer’s liability for taxes and workers’ compensation insurance coverage. While Lowe’s didn’t admit fault, they did settle their suit for $6.5 million.

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4. Translators Billed for $24 Million of Allegedly Unprovided Services: The people involved in this California case also faced overbilling accusations. G&G Translation Services, via their owners and as many as 200 employees, allegedly billed for $24.6 million in translation services that were never performed. Not only were criminal charges brought in this case, there was actually a SWAT-style home raid that took place as part of the investigation.

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5. Nurse Made an Almost Half-million Dollar False Claim: A nurse who worked for the Veteran’s Administration in Georgia was found guilty of fraud in relation to a series of claims filed between 2009 and 2014, which included both medical expenses and travel expenses for travel related to treatment. She received not only three years of probation, but a court order to pay back over $450,000 to the government for her claims against workers’ compensation insurance.

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6. Roofing Business May Have Side-stepped Workers’ Compensation Requirements by Allegedly Lying About Payroll: Eventually found liable for $615,000, the two owners of a roofing business in Massachusetts allegedly underreported their staff’s wages as well as their business earnings in order to avoid additional liability for workers’ compensation Insurance.  

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While there have been thousands of workers’ compensation insurance fraud cases successfully reported, investigated, and prosecuted across the United States in recent decades, obviously those cases with the largest sums of money defrauded from the system have received the most attention.

As an employer, it is important to be on the lookout for staff members who may exaggerate or falsify an onsite injury to garner workers’ compensation payouts. Familiarizing yourself with the most common forms of fraud in cases of workers’ compensation fraud is important, as is surrounding yourself with ethical and competent employees. If you’re concerned about claims in your workplace or if you want to learn more about claim resolution, visit our website today!