| Spring 2006
Fraud-Fighting Corner
By Tim Riley
Manager of Special Investigations
Fraud costs the workers' compensation system millions of dollars every year. These costs trickle down to everyone, including honest employers and their employees. Texas Mutual Insurance Company works hard to fight fraud, and we get results.
SENTENCED—Lloyd Davis of Lexington pleaded guilty to workers' compensation fraud-related charges. The Travis County 147th Judicial District Court sentenced Davis to probation and 150 hours of community service. The court also ordered Davis to pay a $500 fine and repay $8,609 in benefits he fraudulently obtained from Texas Mutual Insurance Company.
Davis suffered an on-the-job injury while working for Magnum Wireline Services. Texas Mutual Insurance Company began paying him supplemental income benefits (SIBs).
The Texas Department of Insurance, Division of Workers' Compensation requires injured workers applying for SIBs to complete and sign a quarterly form attesting to their inability to work and reporting any earnings. Davis filed the form for three quarters. Each time, he claimed that he had earned no wages and that he was unable to work.
Meanwhile, Texas Mutual Insurance Company received information that Davis accepted a job as a prison guard. A Texas Mutual® investigation found that the SIBs forms Davis submitted were false, and that he was working at a prison before and during every quarter for which he signed the state-required form.
SENTENCED—Jose Gaona of Edinburg pleaded guilty to workers' compensation fraud-related charges. The Hidalgo County Court at Law #5 sentenced Gaona to six months' deferred probation and ordered him to repay $1,466 in benefits to Texas Mutual Insurance Company.
Gaona reported a job-related injury while working for Gen Industrial, USA. His doctor placed him in off-work status, and Texas Mutual Insurance Company began paying him income benefits.
Gen Industrial and the adjuster assigned to the claim became suspicious because Gaona was difficult to contact while off work. Texas Mutual® fraud investigators cite this as a possible red flag for fraud. The adjuster referred the claim to the Texas Mutual Insurance Company special investigations department.
The investigation uncovered evidence that Gaona was earning wages with another employer while collecting workers' comp benefits. State law requires injured workers to contact their workers' comp insurance carrier when they return to work.
To help ensure injured workers understand their responsibilities under the law, Texas Mutual Insurance Company includes a note with every income benefit check reminding the injured worker to contact the adjuster as soon as he or she returns to work. Additionally, the company's adjusters often contact claimants directly to determine their work status.
These investigations are part of the Texas Mutual®“zero tolerance for fraud” policy. The company maintains three teams of investigators permanently assigned to investigate every report of suspected fraud.
Red Flags for Fraud
Texas Mutual® investigators developed the following list of red flags for fraud. The company encourages policyholders to send an email to fraudstoppers@texasmutual.com or call (800) 488-4488 immediately if they recognize two or more of these indicators in a claim.
In some cases, Texas Mutual Insurance Company may award up to $1,000 for tips that lead to arrests or indictments.
- Tip from a credible source
- New or disgruntled worker
- No witness to alleged injury
- Inconsistent or illogical description of incident
- Injured worker hard to contact
- Injured worker acts upset when contacted
- Suspicious injury on Monday or Friday
Employers may visit the Fighting Fraud section to read the company's fraud-fighting success stories, download a Fraud StoppersSM poster in English and Spanish, and get more information about reporting possible fraud.
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New Online Features Take "Work" Out of Workers' Comp
President's Message
You Need to Know
Fraud-Fighting Corner