Workers’ comp fraud carries risk of stiff fines, long jail sentences
As regular readers know, we’ve covered many cases demonstrating that it’s just not worth it to try to game the system, regardless of whether the schemer is a provider, carrier, employer or employee.
Today’s cases involve two companies, which naturally tend to involve larger sums, and two employees, whose backgrounds suggest they should know better.
Fifteen felony counts
On the West Coast, the owners of Granite Bay, California-based T.B. Concrete Company, Inc. have “been charged with 15 felony counts of payroll tax evasion and workers’ compensation insurance fraud,” according to a Nov. 30 account in this local news outfit.
According to the Central Valley Business Times, “The owners of a Placer County concrete company have been charged by the state with submitting false payroll reports and misrepresenting the status of employees as independent contractors. The company is accused of owing the state $230,000 in back taxes.
” ‘This company cheated the state out of hundreds of thousands of dollars in taxes and workers’ compensation premiums by submitting phony data and disguising wages as payments to independent contractors,’ says Attorney General Edmund Brown Jr.”
Another Nov. 30 account in the Sacramento Business Journal says, “Thomas Bernhardt, the founder and chief executive, and his wife Rachel Bernhardt, the company’s office manager, are scheduled to be arraigned today in Placer County Superior Court on 15 felony counts of payroll tax evasion and workers’ compensation insurance fraud. Both are free on bail. It was unclear whether the pair had retained counsel.”
Four counts of workers’ comp fraud
In Tennessee, “A Memphis business owner has been busted for Worker’s Compensation Fraud,” according to a local Fox affiliate, reporting on yet another case under-reporting employees.
“Richard Nobles, also known as Mike Nobles, the owner of several subcontract labor companies, was indicted on four counts of workers’ compensation fraud.
“According to the indictment Nobles underreported the number of workers on his payroll with intent to defraud four separate insurance companies of workers’ compensation premiums due to them.”
The story says that Nobles, who owns several subcontract labor companies, is alleged to have underpaid premiums of more than a million dollars.
Indirectly quoted in the Fox affiliate’s story, District Attorney Bill Gibbons said Nobles was difficult to track down and when taken into custody on Nov. 10, he was picked up with “packed bags.”
Facing 12 years on each count
However, according to a Nov. 13 piece in The Memphis Commercial Appeal, “His attorney, Jeffrey Jones, said his client has cooperated with investigators and that he was not trying to flee.
” ‘He understands he is facing serious charges, but flight from prosecution was never a consideration,’ Jones said.
” ‘The state executed a search warrant on his business in June and informed him that he was under suspicion. If he had wanted to flee, he would have done so months ago.’ ”
Nobles, 58, faces up to 12 years on each of the four counts of workers’ comp fraud over $60,000.
Former DOT worker in Connecticut
A Nov. 24 account from a Connecticut news site says, “Former state Department of Transportation employee Clint J. Verdone, 33, of Hebron, was charged with fraudulent claim or receipt of benefits Tuesday, according to a press release issued by the Connecticut Division of Criminal Justice [CDCJ].”
In that press release, CCCJ said:
Clint J. Verdone, age 33, of Hebron, was charged with Fraudulent Claim or Receipt of Benefits, a felony punishable by up to 20 years in prison.
According to the arrest warrant affidavit, Mr. Verdone collected more than $12,000 in disability benefits as a result of a work-related injury he supposedly suffered on September 22, 2009, while employed by the DOT.
The warrant alleges that during the time he was receiving benefits Mr. Verdone failed to disclose his work capacity and the income he earned while working at his business, Diamond Landscaping.
He was released on a written promise to appear in Rockville Superior Court, G.A. No. 19 on December 3, 2010.
Ex-corrections officer gets mix of jail, probation, fine
Apparently facing the least amount of jail time in any of these cases is a man who already pleaded guilty, a former “Attica Correctional Facility officer formerly from Batavia [who] was sentenced to four months in jail and five years of probation Monday in Genesee County Court” in New York, according to a Nov. 15 story in this local new site.
James S. Gibbs, who completed two months’ sentence, will serve two more before being released to probation and has had his share of other problems, according toa Batavia news site: “In May, Gibbs admitted to charges of grand larceny and attempted workers compensation fraud. He also agreed to more than $40,000 in restitution, with $20,000 payable before his sentencing.
“Since then he’s allegedly violated the terms of his presentencing release by getting arrested in Monroe County on a possession of a controlled substance charge, and he’s been through a divorce in which the couple lost their home.”
However, his attorney seems to have been successful in arranging more lenient payback terms. Of a $20,000 scheduled payment, Gibbs has paid about $3,000.
“Over the five years of his probation, his attorney Thomas Burns noted, paying back nearly $38,000 would work out to more than $600 per month, which Burns said seemed like a steep amount to expect Gibbs to pay back (among other expenses, Gibbs must pay child support). He asked for payments of $175 per month.”
The district attorney agreed that the payback term for such an amount in five years would be difficult and Judge Robert C. Noonan set payments at $200 per month, setting a review of restitution for summer 2011.
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Frequently enough, a worker’s compensation case may be so complex as to demand legal representation. However, sometimes what seems like a cut-and-dried situation to an injured worker may result in a smaller award than envisioned–or even a denial. Have you, a friend or a loved one been injured on the job? Whether you’re merely seeking answers about your rights or believe a lawsuit may be necessary, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:
