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.


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.


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.


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.


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.


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.  


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!

What to Do If Your Employee Is Injured on the Job

Though there are legal safeguards in place to protect workers in any industry, here’s what statistics tell us:

One employee is injured every three minutes in Washington State.

While many injury claims are legitimate, the reality is, some employees misrepresent the cause or nature of their injury. This is called workers’ compensation fraud. In some cases, employees may cheat the system in an attempt to reap the personal and financial rewards that come from an on-the-job accident, when their injury did not actually occur at work… or they aren’t actually injured at all. Regardless, employers must follow a specific protocol when any injury is reported.

What Happens When an Employee Reports an Injury?

When employees claim to be injured on the job, they will have to file a report on the accident with the Washington State Department of Labor and Industries (L&I). At this time, you will need to fill out a report about the accident as well. You will be notified in writing if your employee takes out a claim for workers’ compensation coverage. You are allowed, as the employer, to both protest and appeal claims decisions. Any claim decisions can impact your premium for workers’ compensation insurance, which means even if a claim is false, you may end up paying more. For this reason, it’s critical to act as soon as possible if you have a sound reason to believe a claim is false.

How Can You Tell if a Claim is False?

Sometimes, it’s simply that the story of the accident doesn’t quite match up with the nature of the injury. Or perhaps you overhear details before or shortly after the incident that lead you to suspect you don’t know the whole story. Talk to other employees, particularly those who were present or working at the time of the accident and those who socialize with the injured party. Include as much information as possible in official company records, such as human resources reports and interviews.

Does the Evidence Fit the Story?

Does something about the story seem askew? If your company has comprehensive security systems, there may be camera footage of the event and the time leading up to it that can provide insight. Perhaps there’s footage of the injured party arriving at work, already limping from a preexisting injury. Maybe there’s footage of them staging a fall. This is where the process can become sensitive and time-consuming. It’s important to work with an expert to carefully review any evidence left behind from the accident and other applicable materials as you move forward.

What To Do If You Think a Claim Is False

Now is the time to enlist the help of a professional firm such as Stop Claims to begin gathering evidence and fully investigate a fraud allegation. Services may include conducting a private investigation, performing a thorough case review, providing general expertise to follow up on the likelihood of fraud, and (ultimately) potentially saving your company money.

Stop Claims Can Help With Appeals

If you believe an employee has filed a fraudulent workers’ compensation claim, Stop Claims is here to help. We partner with medical and investigative professionals who can help disprove fraudulent claims with credible evidence and ultimately save your company money. We also have a strong track record of demonstrated success — so don’t allow yourself to fall victim to a potentially damaging scam! The choice is easy.

How to Build Positive Relationships with Your Employees (and Decrease the Chance of Workers’ Comp Fraud)

Workers’ compensation fraud can be costly and frustrating, but in order to mitigate it, employers must expand their focus beyond recognizing fraud when it occurs. In many cases, consciously forging positive employee-employer relationships and cultivating strong communication is one of the best precautionary steps to take.

Making this effort can foster an atmosphere of honesty and mutual respect, which can then reduce the motivation for an employee to defraud the company. When employees feel disconnected from and disregarded by an employer or corporation, they may be more likely to rationalize financially cheating that organization. Here’s how to avoid this by building and sustaining a beneficial symbiotic relationship.

Making this effort can foster an atmosphere of honesty and mutual respect, which can then reduce the motivation for an employee to defraud the company. When employees feel disconnected from and disregarded by an employer or corporation, they may be more likely to rationalize financially cheating that organization. Here’s how to avoid this by building and sustaining a beneficial symbiotic relationship.

1. Visit employees in person.Sending emails is convenient and functional, but face-to-face interaction is essential in building any relationship.

2. Provide an open platform for feedback. Start by keeping your office door open as often as possible so employees are invited to enter. When staff members feel they can come to your office to voice any concerns, tell you about new ideas, or even just to say hello, they feel respected — and in turn, they’re more likely to offer up mutual respect. Make every effort to remain approachable.

3. Don’t show favoritism.Be equally fair and just with each and every employee. It’s easier to justify a lapse in accountability when we feel we’re being treated unfairly… and employees may go so far as to rationalize fraud to even the score. This includes viewing yourself as an equal and following all company rules yourself.

4. Go the extra mile. If it’s within your means, try surprising the staff with coffee and donuts or a special-occasion early release as a reward for a job well done. Don’t be afraid to step outside of your office and offer hands-on help with especially challenging projects. This allows people to connect with you as an equal.

5. Keep goals realistic. It’s good to push your team, but don’t push so far that they regularly feel burned out. Besides lowering morale, burnout can be a potentially injury-causing distraction.

6. Cultivate mutual honesty.Ask your employees for their input, and be honest with them in return. Find ways to demonstrate that you value them as people, that you don’t just think of them as nameless workers under your control. This can be as simple as a quick “how was your weekend?” on Monday mornings.

Part of the key to stopping workers’ comp fraud is to make a conscious effort to connect with your workers on several levels. This will take time and regular upkeep, but it can pay off in the end.

equal to a success for employers and employees statewide. Let’s work together to prevent the bad apples from skewing the system against the rest of us!

How Workers’ Compensation Fraud Takes Advantage of You and Your Coworkers

Attention, Washington State employers and employees: Did you know, even if you aren’t directly involved in or victimized by a fraudulent workers’ compensation case, the ripple effect of each statewide fraud case is still likely to reach you?

Employers and employees that are part of the Washington State Fund pay toward workers’ compensation premiums on a quarterly basis, and when fraud occurs, those premiums rise and everyone in the state network suffers. In 2016, Washington State businesses experienced a 2% general rate increase — a number that reflects that year’s open workers’ compensation cases across the board, including fraud and abuse of the system. Furthermore, a new proposed increase of 0.70% is expected to go into effect at the beginning of 2017 if approved.

Why does the L&I base rate matter? An employer’s industry will dictate what base rate they will pay. The resulting workers’ compensation premium cost is deducted from each employee’s hourly wages, as well as from the employer’s profits. When more fraudulent cases occur, premiums skyrocket, and less of your hard-earned dollars end up in your bank account. Even if your business has earned a claim-free discount following a three-year experience period without claims involving time-loss or disability benefits, base rate increases can still raise your final workers’ compensation rates.

Don’t get stuck sacrificing your earnings to pay for a coworker’s (or even a stranger’s) phony injury. Stop Claims sides with employers whose experience ratings and business success have been affected by workers’ compensation fraud. If you believe you’ve been victimized by fraud, our experts will help you face Washington State L&I representatives and boost your chances of a favorable decision. A success for one business facing fraud is equal to a success for employers and employees statewide. Let’s work together to prevent the bad apples from skewing the system against the rest of us!

pile of two dollar bills with 'costs' sign on top

L&I Increases Workers Premiums 2% (Or More!)

The latest increase in workers’ compensation insurance was recently announced by Washington State’s Labor and Industries Department. Rates will be raised by 2 percent across the board in order to accommodate rising costs of compensation for injured workers.

This raise amounts to a little over 1 cent per hour worked, and though that might sound like a very small difference, some businesses will bear increases that are much higher depending on their liability history. If you’ve had compensable claims filed against your business in the past, your rates will rise more–up to 25 percent! This kind of increase in insurance premiums is untenable for many businesses, and can result in layoffs or even business closures.

If you’ve had claims filed against you, these new L&I premium increases are probably hitting your business hard, and if you believe those claims were false or unfair you’re likely furious that your premiums will be increasing up to 25 percent.

Understanding rate increases isn’t easy; neither is fighting those increases. If you want help, contact us at Stop Claims! We’re happy to walk you through these new premiums, help you determine what you’re responsible for, and hopefully help you fight any claims that will raise your premiums and cause you hardship. We have experience successfully helping employers petition L&I, protest or appeal claims, or build a case. You don’t have to take these increases laying down!

workers building a wall

5 Ways Employers Can Prevent Fraudulent Claims

There are some things you can’t prevent or predict, but you can reduce your risk of becoming the target of fraudulent claims in several ways:

1.) Close Communication

  • If you talk to your employees about the risks of filing fraudulent claims–for them legally, and for the entire security of the business and their coworker’s jobs–they will be less likely to pursue those kinds of claims. Make sure you make your zero-tolerance policy on fraud very clear, and also make sure all employees know that they can report fraud anonymously.

2.) Drug Testing

  • One of the most common reasons employees file fraudulent claims is to access prescription medications to which they are addicted. If you detect opiate use in an employee, they’re likely to seek pain medication. Furthermore, drug users are typically more desperate and unreliable than non-drug users, and a positive drug test could be a helpful red flag.

3.) Careful Hiring

  • Keep an eye out for employees with a history of job-hopping, especially if they work in industrial or manufacturing positions where employees typically stay for many years. Furthermore, trust your gut and the feelings of other coworkers; typically, if someone is just looking for an easy payout they won’t work very hard or seem like they’re trying to create good, lasting rapports.

4.) Surveillance

  • Installing video cameras in areas where workers are likely to claim injury (such as loading docks or anywhere ladders are used) is a great way of heading off false claims.

5.) Create a Supportive Working Environment

  • Typically, employees are more likely to file fraudulent claims against employers they don’t know or do know and dislike. They feel like they’re “sticking it to the man,” but if you actually foster a good relationship with workers and create a work environment where everyone is mutually invested in the success of the company, your employees are far less likely to take you for a ride. Sincere employee loyalty is the best insurance against worker fraud.

Of course, if you’re an employer who’s already been the victim of a fraudulent claim, what you need to do now is fight it! Call us at Stop Claims to talk about your options.

stuffed animal with bandage on head

3 Most Common Types of Workers’ Compensation Fraud in Washington State

Workers’ Compensation fraud is incredibly costly. An estimated 10 percent of workers’ compensation claims are fraudulent, costing the industry $5 billion each year. This kind of fraud accounts for 25 percent of all insurance fraud, and between 2005 and 2009, approximately $25 billion in disability payments were either improperly paid out or based in fraud.

According to the State’s Department of Labor and Industries, the most common types of workers’ compensation fraud by employees are:

Collecting time-loss while working.

When someone is paid time-loss benefits or receiving disability benefits for their recovery, they are not allowed to be working. The common symptoms of this disability fraud include working or doing ‘volunteer’ work while on time-loss, being consistently away from home during work hours, working and receiving payment under the table, and receiving unemployment benefits.

Filing a false claim or falsifying a condition.

While you can’t fake a broken bone, ‘soft tissue’ injuries such as strained muscles can be much harder to diagnose, and are usually identified based on the patient’s stated symptoms. A faked condition can lead to claim fraud, where the person is not injured or not injured as extensively as they claim they are.

Failing to register as a contractor.

The state’s Labor and Industries department wants to reduce unregistered contractors, since they are at risk for a variety of improper business practices and contractor fraud:

  • Improperly paying for workers’ compensation insurance.
  • Not paying prevailing or agreed-upon wages (and overtime, where required).


An employee receiving workers’ compensation may be seeking it fraudulently if one or more of the following symptoms apply in their case:

  • Their injury had no witnesses.
  • The injury allegedly occurred while the employee was not at work.
  • There was a delay reporting the incident and associated injuries.
  • Multiple claims are filed.
  • The patient delays seeking medical treatment, and/or misses appointments.
  • The injury allegedly took place concurrent with termination of employment.
  • The employee has personal financial stress.

If you think your employee may be claiming workers’ compensation fraudulently, please contact us for a free consultation.

Featured photo source: Pixabay.com

pills on dollar bill

Opiate Abuse and Chronic Pain in Fraudulent Claims

One of the most common causes for fraudulent claims is chronic pain. It’s almost impossible to prove or disprove, and there are almost no visible physical symptoms. What’s worse is that fraudulent chronic pain claims often begin legitimately, but continue because workers develop an addiction or tolerance to the opioid drugs they’re prescribed to handle the pain, becoming “legacy claims” who seek pain prescriptions for many years after their initial injury.

Defining Terms

Opioids include hydrocodone (Vicodin), morphine, oxycodone (OxyCotin), and other natural or synthetic variations and brand names. It’s a powerful pain-numbing drug that blocks the pain receptors in your brain, and opioids have made life bearable for many sufferers of chronic pain.

“Chronic pain” is pain that persists after a worker should have expected to heal from an injury. After musculoskeletal pain moves from the acute stage into the chronic stage, it will often never leave in the patient’s lifetime. Doctors will often treat this pain with opioids, but this can eventually result in addiction, abuse, or overdosing from an increased tolerance. Oftentimes, patients with chronic pain will seek to supplement their legal prescription drugs with street drugs, compounding their danger. In fact, the first death in our nation from prescription opioids was an injured worker and beneficiary of the Washington Department of Labor and Industries.

A Broken Industry

Opioids were extremely common in the 1990s, but around 2005 awareness of the risks associated with these drugs increased. According to a recent report by WorkerCompCentral, there has since been a sharp decline in the prescription of opioids to workers’ compensation claims involving pain as doctors realized that over-prescription was destructive, bad for workers, and bad for employees.

Despite the fact that physicians have been seriously seeking alternative pain techniques for about a decade, there is still huge reliance in the medical community on opioids for pain treatment, which has led to reliance among patients. In Washington State, 42 percent of workers with compensable back injuries received an opioid prescription within the first year of their injury, and 16 percent of them continued receiving opioids one year after injury.

The California Workers’ Compensation Institute reported in 2011 that 3% of the prescribing physicians accounted for 55% of all opioid prescriptions. This means that a disproportionately small number of doctors are responsible for an entire industry of opioid pain medication. And further, 67 percent of primary care doctors even responded in one survey that they were “somewhat likely” or “highly likely” to presecribe opioids even to an active substance abuser. It is not at all difficult for patients to receive opioid prescriptions, even after many years.

What Does This Mean for Injury Claims?

Many opioid-reliant patients and sufferers of chronic pain started with completely legitimate workplace accidents, such as falls or back injuries, but after treatment with opioids they have become addicted. Rather than treating the underlying issue, the patient becomes more focused on continuing or even increasing medication. And as the California Workers’ Compensation Institute report shows us, it is not difficult for workers to find doctors who are extremely likely to prescribe opioid medication. Unfortunately, employers have to keep paying the cost of this treatment.

If you think a false claim of chronic pain has been filed against you by someone suffering from opioid addiction, Stop Claims can help! We can assist in your investigation of the situation and in the process of rectifying the false claim. Call us today!


The Real Cost of Malingering

There is a serious human cost to falsified injury claims. They can devastate a business and hurt the entire team. An employee might think they’re getting free medical care or a paid vacation, but malingering has consequences that are very serious.

1.) Insurance Premiums

Every business pays mandatory Worker’s Compensation insurance. For many industrial businesses, this is often the most expensive insurance policy the business takes out, even if they have never had a claim filed against them. If there is a claim filed, those premiums will typically increase 25 percent every year for three years, and then decrease by 25 percent each year for three more years, meaning that businesses will suffer from raised premiums for up to six years for one incident! If the incident was falsified, it is not only completely unfair to the business owners to pay these higher premiums, but this has been the tipping point into bankruptcy for many businesses. If your business can’t afford rising premiums and closes, the entire workforce is out of a job. If one employee’s undeserved leave might result in the unemployment of all their coworkers, you need to dispute the claim at all costs.

2.) Other Employees

When one employee is on medical leave, the others are called in to cover for them. If you’re spending too much time nursing an imagined injury, you’re increasing the workload of everyone else. Businesses are often legally obligated to keep you on staff, meaning you can’t even be effectively replaced. Employees have jobs because business needs them, and that need doesn’t disappear when they do. You’d think that the long, stressful hours of a malingerer’s coworker would be enough to discourage people from faking or exaggerating their injury, but unfortunately not everyone prioritizes the in-it-together spirit.

3.) Indirect Costs

When an employee fakes an injury or illness, any direct compensation is covered by the business insurance policy. However, there are a number of indirect costs associated with workers’ compensation claims that are covered by the business. Lost productivity, management being over-stretched by the scheduling demands, the time spent by anyone handling the claim, accommodating an injured employee, or any repair or clean-up associated with injury all come directly from the employer’s pocket.

Don’t get taken for a ride, because the costs add up—if you think your employee might be faking a work-related injury or illness, contact us at Stop Claims!

patient with walker shaking hands with doctor

Top 5 Warning Signs of a Falsified Injury

Falsified personal injury claims—they’re not a victimless crime. Injury claims hurt businesses in terms of insurance premiums, moral, and reputation. If you’re an employer who’s concerned that one of your employees may be falsely filing for workers’ compensation due to a work-related “injury,” follow your gut and investigate. Here are a few of the warning signs that you might have a case of fraud on your hands.

1.) No Insurance

Though less common since the Affordable Care Act, many people do not have any health insurance. If you have temporary employees, part-time employees, or workers on a 1099 or contract basis, and do not offer them health insurance through your business, it’s quite possible that they’re uninsured. If they sustain an injury on their own time, they might falsely claim it occurred while at work so they won’t have to bear the cost of their medical treatment themselves.

2.) Difficult to Diagnose

Broken bones, lesions, bruising—these kinds of injuries can’t be faked. If your employee is complaining of pain that can’t be definitively diagnosed, however, it might be a fabrication. Soft tissue damage is a the most common injury fraud complaint, because it can’t be verified with an X-Ray or MRI, and relies only on the employee describing symptoms that can easily be researched online. Joint pain or head and neck injuries are also very common, and also easy to fake if you’re willing to do a little acting.

3.) No Witnesses

If there were no witnesses to an injury, it could be a red flag for a false claim, especially if that employee is usually working in the company of others. There aren’t many employees who can find a coworker willing to lie for them, risking their job and potential perjury charges, so most fraudulent claims are solo acts. If there is a witness, make sure their stories match up, and that you take their statements separately and possibly more than once.

4.) Monday Accidents

Mondays are the most popular day of the week for fraudulent injuries. Most employees spend their weekday evenings having dinner, watching television, or otherwise winding down, and usually save more active tasks or entertainment for the weekend. They might be cleaning their gutters, dancing the night away, or going on a ski trip—and if they get hurt, don’t be surprised if they come in the next day and claim it happened on the clock.

5.) Repeat Offenders

37 percent of the people who file injury claims file again—these statistics don’t add up! Though it’s possible that someone might injure themselves a second time if the dangers in an unsafe work environment are not addressed after the first claim was filed, it’s also possible that you have a professional liability fraudster on your hands. Be especially wary of a second claim if you already felt like the first claim was suspect and you believe that you’ve fostered a safe environment.

If any of these red flags remind you of an injury claim filed against your business, call us at Stop Claims! We’ll help you investigate the claim, set the record straight, and keep your insurance premiums low.