Hot Potato

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42869361 - red ring binder with inscription insurance policies on background of working table with office supplies, laptop, reports.

Businesses in every state except Texas are required to have workers’ compensation insurance. It covers illness and injuries that occur while on-the-job, regardless of whether the fault falls on the employer or the employee. A Lithonia, Georgia construction business owner committed workers’ compensation fraud by falsifying two certificates of workers’ compensation insurance and presenting them to two general contractors as proof of coverage.

Not every business needs to provide workers’ compensation coverage. In fact, some states don’t require small companies with less than three to five employees to carry it. Workers’ compensation insurance can be expensive depending on the number of employees and the danger level of the jobs. Workers’ compensation insurance covers diseases that occur because of repetitive exposure, on-the-job injuries, medical services, rehabilitation, lost wages, death, and liability insurance for the company when lawsuits are filed by injured employees. (When businesses don’t buy a workers’ comp policy, they are taking a huge risk.)

The construction business owner got into trouble with two general contractors in two different counties when he presented fake insurance certificates so he could work as a subcontractor. (He had not purchased workers’ compensation insurance premiums for his business. Without a valid policy, this company should have been dropped like a hot potato.)

The first general contractor that accepted the bogus insurance certificate had to pay an additional premium of $248. The second general contractor the construction company owner scammed had to pay their insurer $3,503.43 in additional premiums.

For the first offense, the 43-year-old man pleaded guilty to two counts of workers’ compensation insurance fraud. He was sentenced in Cherokee County to eight years of supervised probation and must pay a $1,000 fine and restitution of $3,748. For the second offense, the construction company owner pleaded guilty to two counts of forgery and was sentenced in Walker County to two years of probation. He must also pay a $2,000 fine and $5,176.43 in restitution. (I wonder if it would have been cheaper to pay the workers’ compensation insurance premiums in the first place.)

This construction company owner has built a bad reputation for himself by lying. He may have had trouble finding enough work to keep his business afloat, so he faked an insurance policy so he could work as a subcontractor. This was a huge risk because employers who break workers’ compensation laws must pay fines and cover the bills of workplace injuries and illnesses. They might even have to pay litigation costs if they are sued for an accident. What’s the bottom line? Workers’ compensation insurance coverage is crucial to workplace safety. Businesses can’t afford not to have it.

Today’s “Fraud of the Day” is based on an article entitled, GA: Lithonia Man Pleads Guilty to Workers’ Compensation Insurance Fraud and Forgeryposted on WorkersCompensation.com on September 7, 2017.

Lithonia, GA (WorkersCompensation.com) – The Georgia State Board of Workers’ Compensation’s Enforcement Division Director Stan Bexley announced today that Gerald Swing, age 43, has pled guilty in the Cherokee County Superior Court to 2 counts of insurance fraud in relation to his efforts to avoid paying workers’ compensation insurance premiums for his business. He was sentenced to 8 years of supervised probation as well as a $1,000.00 fine and restitution totaling $3,748.00.

Swing was accused of altering a certificate of insurance to reflect a valid policy for workers’ compensation insurance for G.D. Swing, Inc. d/b/a Swing Construction, Inc., and then providing the fraudulent certificate to a Cherokee County general contractor for the benefit of working and receiving payment as a subcontractor. As a result of accepting the bogus certificate, the general contractor was required to pay additional premium totaling to their business’ workers’ compensation insurer for the amount of $248.00.

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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.