| Spring 2009
Fraud-Fighting Corner
By Tim Riley • Manager of Special Investigations
Fraud costs the workers’ compensation system $7.2 billion a year, more than Yahoo! Inc.’s revenue in 2007, according to the National Insurance Crime Bureau.
Texas Mutual is doing its part to protect your premium dollars. In 2008, our investigators uncovered $10.7 million in fraud and abuse That is:
- $891,418 per month
- $29,307 per day
- $1,221 per hour
- $20 per minute
Fraudulent doctor surrenders license,
repays $144K to Texas Mutual
Ihsan Shanti, M.D. of Houston and Shanti Pain & Wellness Clinic pleaded
guilty to felony workers’ compensation fraud-related charges.
Between January 2003 and March 2006, Shanti and his clinic over-billed workers’ compensation carriers for pain management services in excess of hours actually attended by patients, according to the indictments.
A Travis County district court ordered Shanti to surrender his medical license for five years, pay a $10,000 fine, and repay $143,646 to Texas Mutual, $18,331 to the State Office of Risk Management, and a combined $182,500 to three other carriers.
The court also sentenced Shanti to eight years of deferred adjudication and ordered him to perform 400 hours of community service. In addition, Shanti Pain & Wellness Clinic was ordered to pay a $5,000 fine.
Grand jury indicts two for premium fraud
A Travis County grand jury indicted Jeffery Haas of McKinney and Randall Estes of Allen on workers’ compensation fraud-related charges.
Haas and Estes operated a now defunct company called Toledo Landscaping and Development LLC in McKinney. The indictments allege that from December 2003 to December 2005, Haas and Estes concealed payroll and employees from Texas Mutual.
Because workers’ compensation insurance premium is based, in part, on payroll, the scheme allowed Haas and Estes to obtain a lower workers’ compensation insurance premium than Toledo owed. By hiding payroll to pay a lower premium, a company can gain an unfair advantage over competitors.
Texas Mutual notes that a grand jury indictment is a formal accusation — not a conviction — of criminal conduct.
Busy laborer sentenced for fraud
A Travis County district court sentenced Randy Alexander of Anahuac on workers’ compensation fraud-related charges.
The court sentenced Alexander to 30 days in jail, five years’ probation and 200 hours of community service. It also ordered him to repay $10,032 to Texas Mutual.
Alexander reported a job-related injury while working as a laborer for Channel Refractory Services Inc. in Channelview. He claimed he was unable to work as a result of the injury, and Texas Mutual began paying him income benefits.
Meanwhile, Texas Mutual uncovered evidence that Alexander was working as a laborer for nine different employers in Texas while receiving disability income benefits.
Investigators call this type of scam double-dipping because the claimant collects benefits for being too injured to work when he or she is gainfully employed.
Texas law requires claimants to contact their workers’ comp carrier when they return to work. Left unchecked, double-dipping can lead to higher premiums for all Texas employers.
In other claimant fraud news
SENTENCED— Gilbert Madrid of Odessa. The court ordered Madrid to serve five years’ probation, perform 200 hours of community service, attend treatment and counseling, and repay $3,818 to Texas Mutual.
SENTENCED— Billy Morgan of Irving. The court sentenced Morgan to one year of deferred adjudication. It also ordered him to pay a $500 fine and repay $1,443 to Texas Mutual.
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