| Winter 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
A Travis County district court sentenced Sheran Keyton of Fort Worth on workers’ compensation fraud-related charges.
The court ordered Keyton to repay $3,146 to Texas Mutual, perform 80 hours of community service and serve one year of deferred adjudication.
Keyton reported a job-related injury while working as an actor for the Dallas Children’s Theatre. She claimed she was unable to work as a result of the injury, and Texas Mutual began paying her income benefits.
Meanwhile, Texas Mutual uncovered evidence that Keyton was working in a similar job for another company while receiving 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, in fact, gainfully employed.
Texas law requires claimants to contact their workers’ comp carrier when they return to work. Left unchecked, double-dipping and other workers’ comp fraud can lead to higher premiums for all Texas employers.
Business misrepresents payroll
Erection Professionals Inc. in Pleasanton pleaded guilty to workers’ compensation fraud-related charges. A Travis County district court ordered the company to repay $200,000 to Texas Mutual Insurance Company.
Erection Professionals, owned by Gregory S. Dicaro, was in the business of erecting metal buildings. Texas Mutual alleged that from April 2004 to July 2006 and February 2007 to August 2007, Erection Professionals intentionally misrepresented the number of its employees and its payroll to Texas Mutual.
Because workers’ compensation insurance premium is based, in part, on payroll, this type of scheme results in an employer being charged a lower premium than it actually owes. By hiding payroll, an employer can gain an unfair advantage over competitors.
In other fraud-fighting news
Here is a list of claimants who were indicted for double-dipping, along with the amount in benefits they allegedly collected illegally.
INDICTED— Bobby Phifer of Greenville, $10,221
INDICTED— Tobias Arias of Tyler, $10,100
INDICTED— Jorge Barajas of Dallas, $3,232
INDICTED— Heide Bolton of DeRidder, LA, $2,376
INDICTED— Charles Richter of Austin, $1,679
INDICTED— Robert Rosette of Port Arthur, $1,597
Note: A grand jury indictment is a formal accusation – not a conviction – of criminal conduct.
We need your help
Many of our fraud investigations start when a policyholder reports suspicious activity. If you see two or more of these red flags in a claim being handled by Texas Mutual, notify us immediately at fraudstoppers@texasmutual.com or (800) 488-4488:
- Tip from a credible source
- New or disgruntled worker
- No witness to alleged injury
- Inconsistent or illogical description of incident
- Hard to contact injured worker
- Injured worker acts upset when contacted
- Suspicious injury on Monday or Friday
Fraud-fighting resources on the Web
Visit the Fighting Fraud section at www.texasmutual.com to read our fraud-fighting success stories, report suspected fraud, and get a Fraud StoppersSM poster for your workplace.
COMPNEWS - Winter 2009
Want to Control Workers’ Comp Costs and Improve Productivity?
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Claim Teams Take Care of Your Injured Workers
Workplace Fatalities Decrease
President's Message:
Rest Easy - Your Agent Gave You Good Advice
You Need to Know
Fraud-Fighting Corner
Reminders
Learn More About the Workers' Comp System