Lots of Red Flags

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46466081 - back pain.

Red flags are anything that stands out from the ordinary. (They usually signify that something is amiss.) Today’s fraud spotlight shines on a man, who worked for a Perris, California based company. After experiencing a work-related injury, he was declared permanently disabled. But a few red flags were raised after he was observed working in a rigorous manner. He originally claimed he was unable to work due to pain. What he didn’t realize was how painful a workers’ compensation fraud conviction could be.

The worker claimed he injured his back on-the-job while bending over and removing nails. As a result, he was deemed temporarily disabled and issued work restrictions. Later, he demonstrated to his medical providers that he had a limited range of motion, claiming he was unable to work because of the pain. More medical evaluations followed, and he denied that he was engaging in any rigorous activities. (He told them that he wasn’t physically capable of doing any strenuous tasks or many of the routine, daily activities he normally performed.) This is the point at which he was deemed permanently disabled.

At some point along the way, an insurance adjuster identified some red flags in the worker’s claim and an investigation was opened. (Here’s where the story becomes entertaining.) Surveillance began, and video footage of the worker was captured showing him digging holes with a shovel, climbing in and out of the holes, jumping over a fence, installing a roof liner inside a vehicle, carrying a tool bag and automotive parts weighing more than 15 pounds. (Definitely all things that a permanently disabled person would not be able to accomplish.)

Because the supposedly disabled worker was unaware that he had been secretly videotaped performing many of the things he claimed he could not do, he made multiple misrepresentations about his physical condition in a deposition. He testified that he hadn’t performed any yard work, done any automotive repair or lifted anything over 15 pounds since his injury. (The surveillance video proved otherwise. Busted!)

The Perris, California worker pleaded guilty to workers’ compensation fraud and was sentenced to three years of probation and ordered to serve 30 days in a Sheriff’s Work Release Program. He was also ordered to pay reduced restitution fees of $30,000 to his former employer. (According to the article, he has already paid the $30,000 back, which was part of a plea deal to lower the restitution amount.) The Californian also owes additional fees of $1,536.83.

Well, it looks like this fraudster ended up waving a white surrender flag after his exaggerated claims raised some red flags. To become savvy on other indicators that might point out an individual who is engaging in workers’ compensation fraud, check out this Association of Certified Fraud Examiners blog on the red flags of workers’ compensation claimant fraud.

 Today’s “Fraud of the Day” is based on an article entitled, Convicted of WC Fraud, Man Receives Jail Time, Ordered to Repay $30K to Former Perris Employer,” published by Riverside County News Source on May 21, 2018.

PERRIS — A man whose claims of a work-related injury resulted in his eventually being declared permanently disabled was later proven to have grossly exaggerated his claimed injury-related limitations after surveillance video evidence showed “substantial discrepancies” in his claims.

Earlier this month – after a lengthy Workers’ Compensation fraud investigation – Julio Cesar Gomez was arrested on three felony charges related to WC fraud and later pleaded guilty to a single felony count.

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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.