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Individuals who work in the landscaping business have lots of opportunities to injure themselves while on-the-job. The Centers for Disease Control and Prevention (CDC) reports that landscaping is one of the highest hazard industries with a fatality rate of 25.1 per 100,000 workers. (The average for all other industries is 3.8.) A Pflugerville, Texas landscaping business tried to avoid the high cost of workers’ compensation insurance for its employees. In the process of trying to save a few bucks, the company committed workers’ compensation fraud.

 Landscape work generally includes the installation and maintenance of lawns, shrubs, plants and trees. (That requires a lot of individuals who can work with sharp objects and are not afraid of heights when it comes to trimming trees. Rakes, hoes, and hedge trimmers, oh my!)

Workers’ compensation premiums are based on an employer’s payroll, job classification codes and the employer’s past losses, which are key to predicting future losses. Over six years, the Pflugerville-based landscape company tried to trim their workers’ compensation insurance premium costs by lying about the size of their payroll. (When an employer misrepresents or manipulates any of these factors to get lower rates it’s premium fraud.)

Premium fraud is one way a dishonest business can gain advantage over ethical companies who play by the rules and pay the full cost of the premiums. (If a company’s insurance premiums are lower, they can bid lower on contracts by beating out other competitors.) It’s not fair to competitors, nor the workers who are doing the dangerous work.

The Texas Department of Insurance, Division of Workers’ Compensation (DWC) prosecuted the landscape company. A guilty plea for workers’ compensation fraud was entered and the company was ordered to pay $400,000 for misrepresenting its payroll so it could pay less for insurance coverage for its workers.

Workers’ compensation insurance is intended to provide wage replacement and medical benefits to those who are injured while working. (When a company provides this benefit, the worker loses their right to sue the company for negligence.) When dishonest companies commit workers’ compensation fraud by lying about their payroll, they not only put themselves at risk like today’s landscape company, but also their employees’ coverage. While the landscaper may be an expert in lawn care, planting flowers and the right fertilizer to use, it looks like this gardener has had his business pruned in order to produce compliance with the law.

Today’s “Fraud of the Day” is based on an article entitled, Texas Landscaper Must Pay $400K in Workers’ Comp Fraud Case,” posted on on April 3, 2018.

A Pflugerville, Texas, landscape company pleaded guilty March 21 to misrepresenting its payroll so it could pay less for workers’ compensation coverage, according to the Texas Department of Insurance.

Jammers Groundscapes entered the plea in a Travis County District Court and was ordered to pay $400,000 to Texas Mutual Insurance Co., the workers’ compensation carrier. The conviction resulted from a Texas Mutual investigation.

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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.