A Lapse in Judgement

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Who doesn’t love a good surprise? (I’m talking about walking into a dark room to be serenaded by friends and family to a harmonious rendition of “Happy Birthday.”) How about the surprise of a brand new luxury sedan topped off by a red bow parked in your driveway on Christmas morning? Today, our “Fraudster of the Day” experienced two surprises that he had never imagined happening. The Northeast Ohio man called the police to report that his truck had been broken into and subsequently found himself under arrest for workers’ compensation fraud.

Workers’ compensation fraud can be committed by employees as well as employers. The man profiled in today’s case owned his own tree service company. When one of the man’s employees was investigated by the Ohio Bureau of Workers’ Compensation (BWC) for fraud, agents discovered that the employer continued to operate despite letting his BWC coverage lapse. (Sounds like a huge lapse in judgement on his part.)

In the State of Ohio, all employers with one or more employees are required to carry workers’ compensation insurance. (This protects the employer from being sued and it provides medical treatment for the employee who is injured.) The employer reported that he had one employee. (BWC Investigative agents observed a regular crew of four to six workers.)

So, imagine the tree company owner’s surprise when he went to report a theft. He had no idea there was an outstanding warrant for his arrest for committing workers’ compensation fraud. The warrant had actually been issued a year prior to his arrest, following his indictment by a grand jury.

The 47-year-old man pleaded guilty to a first-degree misdemeanor for the workers’ compensation fraud. The judge cut him some slack and ordered two years of good behavior instead of a 180-day jail sentence. (He even got three days trimmed off his sentence after serving time in jail.) He has already paid $8,000 to the BWC to decrease the balance owed.

The BWC offers some good advice on spotting employer fraud. Here are some red flag indicators that something is amiss: if a competitor consistently underbids on contracts, it could be because they aren’t paying their workers’ compensation insurance coverage; the employer doesn’t visibly display their certificate of coverage or the certificate has an expired date listed; the employer incorrectly reports the amount of payroll or shifts the payroll to lower cost jobs to avoid paying the correct premium; and, employees are misclassified as independent contractors or subcontractors. If any of these tactics are used, workers’ compensation fraud may be happening.

So, what’s the moral of this story? (Lock your vehicle doors and you’ll never be arrested for workers’ compensation fraud? Sadly, no.) Don’t put yourself or your employees at risk. Keep up-to-date on your insurance premiums.

Today’s “Fraud of the Day” is based on an article entitled, Northeast Ohio man reports crime, gets arrestedpublished by the Ohio Bureau of Workers’ Compensation.

COLUMBUS — When James Glen Willis called police to report a theft from his vehicle in May, police made a quick arrest — of Willis himself.

Willis, of Jackson Twp. in Stark County, apparently didn’t know there was a warrant out for his arrest for committing workers’ compensation fraud. He spent three days in jail and pleaded guilty to the first-degree misdemeanor on May 30 in the Stark County Court of Common Pleas. A judge ordered him to two years of good behavior in lieu of a 180-day jail sentence and gave him credit for three days served.

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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.