Fall 2006

Fraud-Fighting Corner
By Tim Riley
Manager of Special Investigations

Fraud costs the Texas workers’ compensation system millions of dollars every year. That’s why Texas Mutual Insurance Company works so hard to stamp it out.

We pursue claimants who knowingly collect benefits they are not entitled to. We pursue employers who gain an unfair advantage over their honest competitors by knowingly misrepresenting information to lower their premiums. We pursue health care providers who knowingly inflate bills or submit false bills. We investigate every report of suspected claimant, premium and health care provider fraud we receive, and we get results.

Claimant fraud
SENTENCED—Orville Ray Anderson of Amarillo pleaded guilty to workers’ compensation fraud- related charges. The Randall County 181st District Court sentenced Anderson to a one-year prison term.

Anderson reported a job-related injury while working as a truck driver for Golden Spread Redi-Mix. His doctor placed him in off-work status, and Texas Mutual Insurance Company began paying him workers’ comp income benefits.

Meanwhile, Texas Mutual Insurance Company received an anonymous tip on its Fraud Stoppers_SM hotline that Anderson was working for another employer while he collected benefits. State law requires injured workers to contact their workers’ comp insurance carrier when they return to work. The company opened an investigation and uncovered evidence supporting the tip.

INDICTED—In unrelated cases, Lubbock and Dallas County grand juries indicted two professional football players on workers’ compensation fraud-related charges.

Shaheed Richardson and Kerry Linnear reported job-related injuries while playing professional arena league football. Their doctors placed them in
off-work status, and Texas Mutual Insurance Company began paying them workers’ comp income benefits.

Meanwhile, Texas Mutual Insurance Company uncovered evidence that both men were earning wages while they collected benefits. In fact, Richardson was playing professional arena football in another league. State law requires injured workers to contact their workers’ comp insurance carrier when they return to work.

Texas Mutual Insurance Company presented Richardson’s case to a Lubbock County grand jury and Linnear’s case to a Dallas County grand jury. The indictments allege that Richardson and Linnear collected $1,534 and $2,627, respectively, in workers’ comp benefits they were not entitled to.

Premium fraud
SENTENCED—Danny Katave of Richardson pleaded no contest to workers’ compensation fraud-related charges. The Travis County 331st District Court ordered Katave to repay $250,000 to Texas Mutual Insurance Company and pay a $4,000 fine. The court also sentenced Katave to two years’ deferred adjudication.

Workers’ comp premium is based in part on payroll. The investigation revealed that Katave misrepresented the status of employees as independent subcontractors. Because independent subcontractors are not included in the payroll portion of the premium calculation, the scam allowed Katave to pay a lower premium than he actually owed.

INDICTED— A Travis County grand jury indicted C & D Business Services, Inc., C & D Services, Inc., Donna Iversen, Carol Wiesman and Timothy Carney on workers’ compensation fraud-related charges. The companies and individuals allegedly defrauded Texas Mutual Insurance Company of over $875,000 in premium.

C & D Business Services, Inc. and C & D Services, Inc. are temporary employment agencies with offices in the Dallas/Forth Worth area. The indictments allege that between April 11, 2003 and March 31, 2006, the defendants concealed business relationships and payroll records from Texas Mutual Insurance Company. Because workers’ comp premium is based in part on payroll, the scheme allowed the companies to pay less premium than they actually owed.

In a related case, a Travis County grand jury indicted Harold Wayne Dennis on perjury charges. Dennis allegedly presented false testimony on matters relating to the investigation of C & D Business Services, Inc., Wiesman and Iversen.

Health care provider fraud
INDICTED—A Travis County grand jury indicted Ihsan Shanti, M.D. of Houston and his health care facility, Shanti Pain & Wellness Clinic, on felony workers’ compensation fraud-related charges. The indictments were the result of investigations conducted by Texas Mutual Insurance Company and the State Office of Risk Management.

Shanti Pain & Wellness Clinic provides medical services to injured workers in Texas. The indictments allege that between January 2003 and March 2006, Shanti and his clinic billed Texas Mutual Insurance Company and the State Office of Risk Management for pain management services in excess of hours actually attended by patients.

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

Employers may visit the Fighting Fraud section to read the company’s fraud-fighting success stories, download a Fraud Stoppers_SM poster in English and Spanish, and get more information about reporting possible fraud.

COMPNEWS - Fall 2006
Top Ten Ways to Improve Your Safety Program
Texas Mutual Expands Network Service Areas
New Interactive Tools Help Employers Improve Workplace Safety
New Program Recognizes Safe Workplaces
President's Message
You Need to Know
Fraud-Fighting Corner

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