Rubbed the Wrong Way

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According to the National Council on Compensation Insurance (NCCI), Alaska has the unfortunate honor of having some of the highest medical costs in the U.S., which also translates into the highest workers’ compensation premium costs in the nation. (The higher the medical bills, the higher the premium charged to businesses who want to protect their employees when on-the-job injuries occur.) One of the reasons that premiums are high is fraud. A former Fox, Alaska Department of Transportation and Public Facilities (DOTPF) employee contributed to some of those exorbitant insurance premiums by committing workers’ compensation fraud. (You could say that he rubbed his employer and their insurer, not to mention the state government, the wrong way.)

Here’s how the story goes. The former DOTPF employee, who was a weigh station operator, incurred an injury in 1999. Weigh station operators are responsible for making sure that trucks are not overloaded with freight and meet all state and federal requirements for getting back on the road. (Perhaps he injured himself while lifting a heavy piece of freight, or maybe while inspecting cargo, something heavy fell on him.)

The injured man moved to Wisconsin about three years later, settling his workers’ compensation claim with the State of Alaska in 2008 for $201,500. (Alaska also agreed to pay for future medical treatment.) The former DOTPF employee used some of the state benefits for massage therapy. Over the next three years, the man and his masseuse submitted fraudulent workers’ compensation claims for services he did not receive from the masseuse. (He also submitted mile reimbursement claims related to the massage treatments.) Apparently, the Alaskan received payment for more than $20,000 worth of massages. (Who wouldn’t love to receive that many massages?)

Both the supposedly injured worker and his masseuse were charged with 93 counts of perjury, theft and falsification of business records. The man was found guilty by an Anchorage jury of workers’ compensation fraud. The masseuse pled guilty to workers’ compensation fraud, testifying against the injured Alaskan during his trial. The terms of her plea agreement require her to pay $20,391.46 in restitution to the State of Alaska for the massage treatments she did not perform.

The former Alaska Department of Transportation worker, who committed workers’ compensation fraud, is partly responsible for driving up the costs of insurance and medical care for everyone. When sentenced this fall, he will face a possible sentence of up to a decade in prison and a fine of up to $100,000 plus restitution to the State for charges related to the scheme to defraud. For the theft and falsification of business records charges, he could get another five years behind bars, a fine of up to $50,000 and restitution to the State of Alaska. According to the article, he apparently did not show any remorse. (He may regret that when the judge delivers his final sentence. It’s too bad that he rubbed the government the wrong way, because it’s a given that the government has now cut off his massage allowance.)

Today’s “Fraud of the Day” is based on an article entitled, Former Alaska DOT worker charged with workers’ comp fraud,” published by Anchorage Daily News on May 20, 2013.

A former Alaska Department of Transportation worker and his supposed masseuse were charged with defrauding the State of Alaska out of more than $20,000 of worker’s compensation benefits, the state Department of Law said Monday.

Scott A. Groom and Laurayne K. Fischer, both currently living in Wisconsin, were charged with 93 counts including perjury, theft and falsification of business records.

Groom was an operator at a state DOT weigh station in Fox when he was injured on the job in 1999, according to the Department of Law. In 2008 he settled a worker’s compensation claim with the state for $201,500. The state agreed to pay for medical treatment as part of the settlement.

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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.