Winter 2005

Fraud Corner:
By Tim Riley
Manager of Special Investigations

Fraud costs the workers’ compensation system millions of dollars every year. Those 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—Thomas Whited of Bastrop pleaded guilty to workers’ compensation fraud-related charges. The Travis County 167th District Court sentenced Whited to a one-year suspended jail term with the following conditions: serve 30 days in jail, repay $2,441.25 in benefits to Texas Mutual Insurance Company, perform 160 hours of community service, attend treatment and counseling as recommended by probation, and pay a $250 fine, plus court costs.

Whited reported a job-related injury while working for C.W. Oates Masonry Inc. He began collecting temporary income benefits (TIBs) after his doctor placed him in off-work status.

A C.W. Oates employee contacted the Texas Mutual^® special investigations department after observing Whited working as a mason on another construction project. The investigation uncovered evidence that Whited started his new job three days after he reported his alleged injury, and he continued to collect TIBs while working.

Investigators call this sort of scam “double-dipping” because the perpetrator, in effect, gets paid twice: once by his new employer for working, and again by his previous employer’s insurance company for being too injured to work. If allowed to continue, double-dipping scams can lead to a higher workers’ compensation insurance premium for the first employer when the company renews its coverage.

State law allows injured workers to receive TIBs only while they are unable to work. The law also requires injured workers to notify their workers’ compensation insurance company when they begin working again.

INDICTED— A Dallas federal grand jury indicted Alpha Treatment Centers Inc., doing business as Texas Durable Medical Equipment (TDME), along with two of its employees, Andrew Hillman and Jason White, on 27 counts of fraud-related charges.

Hillman, White and TDME allegedly submitted bogus reimbursement claims to state and federal workers’ compensation insurance carriers. If convicted on all counts, each defendant faces a maximum statutory sentence of 265 years in prison and millions of dollars in fines and restitution. United States Attorney Richard B. Roper praised Texas Mutual Insurance Company for its role in the investigation.

Note: A grand jury indictment is a formal accusation—not a conviction—of criminal conduct.

Each of these investigations is part of the Texas Mutual^® “Zero Tolerance for Fraud” policy. Texas Mutual Insurance Company maintains three teams of investigators permanently assigned to investigate every report of suspected fraud.

Fraud Resources on the Web
Visit the Fighting Fraud section at texasmutual.com to:

• Report suspected fraud
• Learn the red flags for fraud
• Read our fraud-fighting success stories
• Download our FraudStoppers_SM poster

COMPNEWS - WINTER 2005
Health Care Network Option Coming Soon
Five Reasons You Should Report Every Workplace Injury
Cleaning Up Workplace Substance Abuse
President's Message
You Need to Know
Fraud Corner

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