Better to Have It and Not Need It

Delivery man driving van with packages on the front seat. Happy mature courier in truck. Portrait of confident express courier driving his delivery van.

Workers’ compensation premiums can be very pricey, but the cost of not having a policy can be even more expensive for an employer. If an accident occurs and an employer has allowed a workers’ compensation policy to lapse, the injured worker can sue the employer for all damages and expenses. Depending on the extent of the injury, the lawsuit could put an employer out of business. The owner of a Mansfield, Ohio freight hauling and trucking company took a chance and operated his business without workers’ compensation insurance to avoid the high premiums. (Let’s just say that the Ohio Bureau of Workers Compensation (BWC) wasn’t too happy about the owner’s workers compensation fraud scheme.)

 BWC’s special investigations department discovered that the trucking company owner did not have workers’ compensation insurance coverage for his business. While the BWC did make several attempts to work with the owner to bring his policy into compliance with state laws, the owner neglected to pay the agency $137,447 in policy premiums and $6,953 for investigation costs.

When the trucking company owner declined to work with the BWC, the agency subpoenaed bank records and performed a business audit. They found that the trucking company owner under-reported his payroll over multiple pay periods so he could lower the amount of money he owed the BWC. (He probably reported that he had fewer employees, which meant the cost of his workers’ compensation policy was cheaper.)

The business owner not only lied about his payroll, but he also falsified new applications for BWC coverage. He failed to list previous policies he had with the agency and reported the incorrect number of employees. (I’m sure that went over like a flat tire with the BWC.)

The trucking company owner was convicted on four felony charges related to workers compensation fraud. He now has to pay the BWC $144,000 in restitution. (I guess that’s better than being sued by an injured employee and going out of business.) In addition to the restitution, the business owner must serve two years of probation for the workers compensation fraud conviction and tampering with records. (This case proves the point that sometimes it’s better to have workers’ compensation insurance and not need it than to need it and not have it.)

Today’s “Fraud of the Day” is based on an article,Ohio Freight Hauler Sentenced for Workers’ Comp Fraud, Must Repay $144K,” published by Insurance Journal on April 16, 2019.

The owner of a Mansfield, Ohio, freight hauling and trucking company convicted on four felony charges related to workers’ compensation fraud, has been ordered to pay the Ohio Bureau of Workers’ Compensation (BWC) $144,400 in restitution.

The BWC reported that Robert Tate, owner of Elite TNT Enterprises, also was ordered to serve two years of probation. He was convicted on two counts of workers’ comp fraud, fourth-degree felonies, and two counts of tampering with records, third-degree felonies.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.