Black Belt in Fraud

High Angle View Of A Person With Fractured Hand Filling Health Insurance Form

Workers’ Compensation programs are intended to aid those who have been injured on-the-job and are unable to return to work. This program provides financial support to the injured party in the form of wage compensation. Fraudsters often seek to exploit workers’ compensation benefits by feigning injuries or continuing to claim disabilities despite fully recovering. 

This was the case with a former Federal Air Marshal employee from Providence, R.I., who admitted to lying to the U.S. Department of Labor (DOL) and Office of Workers’ Compensation Programs (OWCP). He lied about his recovery status so that he could continue to receive OWCP benefits that he was not entitled to. (Fraudsters like to get paid to do nothing.)

Joseph Watterson admitted that he concealed that he was self-employed on his benefit forms. He knowingly failed to disclose that he owned and operated a martial arts business, Two Swords Brazilian Jiu Jitsu, which required him to engage in strenuous physical activities.

Watterson eventually admitted on his OWCP forms that he was self-employed but failed to disclose the nature of his employment and that he was not disabled as he claimed to be. (It’s safe to say you’re in pretty good shape if you can successfully do Jiu Jitsu). He continued to lie on his OWCP forms so that he could collect monthly disability payments.

He concealed that his employment required him to frequently instruct and engage in Jiu Jitsu. Watterson claimed that he was merely an administrative overseer of daily operations. According to the DOL, Watterson claimed he was only there to help clean and maintain the school and to help with the bookkeeping. (I’m guessing he cooked his own books.)

These lies allowed Watterson to fraudulently collect $241,118.52 in disability benefits over nearly three years. (He was making about $80K a year for doing nothing but lying.) Watterson pleaded guilty to false statements to obtain federal workers’ compensation benefits.

Watterson is scheduled to be sentenced in January 2021. (While 2020 has been pretty crappy, it looks like 2021 is not going to be much better for him.) Watterson could face up to 5 years imprisonment, a fine of $250,000, and a three-year term of supervised release. 

If you suspect someone of committing Workers’ Compensation Fraud, report it to the Office of Inspector General’s online complaint form.

Today’s Fraud of the Day comes from a Department of Justice Press Release,  “Federal Air Marshal Employee Admits Fraudulently Receiving Disability Payments,” dated November 10, 2020.

PROVIDENCE – A former Federal Air Marshal employee admitted in federal court in Providence today that he concealed his self-employment and then his role in a Middletown-based martial arts business from the United States Department of Labor (DOL), Office of Workers’ Compensation Programs, in order to collect nearly a quarter of a million dollars in OWCP disability benefits based on his employment with the government.

Joseph Patrick Watterson, 52, of Newport, admitted that he initially concealed on OWCP forms the fact that he owned and was engaging in physical activities at his martial arts business, Two Swords Brazilian Jiu Jitsu. Later, after admitting that he was self-employed, he concealed on OWCP forms the true scope of his employment activities at his martial arts studios, because he did not want his OWCP benefits to be reduced or terminated.



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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.