Better to Have It and Not Need It

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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
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.