One particular form of White Collar Crime is workers compensation fraud. One example of workers compensation fraud was reported on by ABC News and involved Bruce Gilbert, a bus driver who talked like a five year old, a problem his wife blamed on an on-the-job accident (Hunter). Gilberts wife claimed that her husband suffered from a regressive mental ailment that effectively gave him the mental capacity of a child of about five (Hunter). Over the course of 10 years, the Gilberts received approximately $774,000 in workers compensation.
A private investigator, however, found that not only was Bruce Gilbert still able to drive, but he was also able to hunt and golf as well. In April of 2000, he was arrested for workers compensation fraud and grand theft. His wife was also arrested. The two each received 15 years of probation and had to pay back all of the money they received from the workers compensation. Since our research, the Gilberts have only paid back $4000. Sadly, this is only one case out of many that exist.
Workers compensation fraud or claimant fraud has been a growing problem since the late 1980s. Claimant fraud happens when employees knowingly lie to collect benefits. They may claim an injury was work-related when it wasnt, exaggerate an injury, or secretly continue working while collecting benefits (Wylie). Claimant fraud costs the nation approximately $31 billion dollars a year. It is estimated that about 10% of all claims involve some sort of fraud or benefit abuse. Due to this rampant fraud, numerous states have passed legislation against claimant fraud.
Before claimant fraud can be proved, however, businesses must first know the myths and signs of workers compensation fraud and be able to prove it. If an individual files a claim, several red flags should appear. According to Automatic Data Processing Incorporated (ADP), if an individual has a history of filing workers compensation claims we need to report the accident date, nature of the injury, the type of accident as well as the part of the body that was injured. Businesses should also look at the award/compensation and the total amount that was paid.
Also, if your business uses workers compensation searches, there are several important compliance considerations and responsibilities. Also, the ADA Act (Americans with Disabilities Act) allows you to order workers compensation records, and governs how you are able to use the medical and disability information during a companys hiring process. ADPs Human Resource help desk professionals put together a list of warning signs that businesses should be aware of when dealing with workers compensation.
The first sign is if no one witnessed the injury other than the employee filing the workers compensation claim. The second sign is if the injury occurred late Friday or early Monday. The third sign is if the injury was not reported until a week or more after it had allegedly occurred. The fourth sign is if the employee received an injury that had occurred a day before a strike or holiday, or anticipation of termination. The fifth sign is if the injury occurred in a location where the employee does not normally work. The sixth sign is if the injury was inconsistent with the employees normal job duties.
The seventh sign is if others see the employee engaged in activities that should not be possible due to his or her reported injury. The eighth sign is if health care providers give conflicting diagnosis for the employee. The final sign is if there is evidence that the employee is working elsewhere while drawing workers compensation benefits from the business. Although there are many warning signs to watch for when trying to prove workers compensation fraud, there are numerous myths regarding workers compensation as well.
Some of the myths include the idea that businesses control workers compensation premiums. The fact is that premiums are based on the choices that the businesses make. The premiums tell the business how much they will be able to spend on coverage for workers compensation. If safety is promoted it reduces the odds of employee injuries. Another myth is that fraud is not a big deal with regards to workers compensation. The fact is that fraud costs both the business and the insurance company millions of dollars nationwide.
If businesses are able to recognize the red flags that were mentioned earlier it would help reduce fraud. An additional myth includes the idea that the less you bring up workers compensation with employees the more you save and better your company. The fact is that the company will not lose anything if it helps educate employers about their rights, benefits, and workers compensation. When all the parties are educated, no one is left in the dark or confused. If companies do not address the issue of work-related injuries, and how to go about dealing with the situation, the ordeal may worsen.
Also, many people think that when an employee becomes injured, the company should stay out of the situation. However, the company should monitor the situation to ensure that a case of workers compensation fraud does not occur. In order to prove that workmans compensation fraud has taken place, the employer must have hardcore evidence that a crime, or some sort of suspicious activity has taken place with the employee who filed for workmans compensation. Some employers will go to great lengths to try to prove that an employee has committed a fraud.
For example, an employer may hire a private investigator to videotape a claimants every move. It is in this way that many claimants are exposed for committing fraud. Many of these videos will show a claimant engaging in sports or other strenuous physical activity despite the so-called disability (Workers Compensation). Almost everyday throughout the United States, someone is being convicted of a fraudulent crime. Below are a few statistics about workers compensation fraud: More than 1 in every 3 bodily-injury claims from car crashes involves fraud.
Workplace injury rates are now at the lowest level since the agency began tracking information in the 1970s, according to the Bureau of Labor Statistics, nearly 1 in 10 Americans would commit insurance fraud it they knew they could get away with it, and more than 1of 3 Americans say its ok to exaggerate insurance claims to make up for the deductible (Workers Comp Fraud). All of those statistics show just a small portion of how fraud, especially insurance fraud is becoming a widespread problem.
Many laws have been formed to try to decrease the occurrence of workmans compensation fraud. Some of the laws created include the Federal Employment Compensation Act, Federal Employment Liability Act (FELA), Merchant Marine Act, Longshore and Harbor Workers Compensation Act (LHWCA), Black Lung Benefits Act, and the Californias Workers Compensation Act. These acts all include benefits and restrictions to workmans compensation that help with decreasing the occurrence of fraud. The Federal Employment Compensation Act provides workers compensation for non-military, federal employees.
Many of the provisions are typical of most worker compensation laws and the awards are limited to disability or death that is sustained through the performance of the employees duties (Workers Compensation). These injuries are not caused willfully by the employee or by intoxication. This act covers medical expenses that are acquired through the disability of the employee and it may be required for this employee to undergo job retraining. The employee will receive two thirds of the normal salary (Workers Compensation). The Federal Employment Liability Act is another act that aids in the deterrence of workmans compensation fraud.
The FELA provides that railroads engaged in interstate commerce are liable for injuries that are sustained by their employees if they have been negligent (Workers Compensation). The Merchant Marine Act, or the Jones Act is another act against workmans compensation fraud. It is in this act that seamen are provided with the same protection from employer negligence as the FELA provides railroad workers with (Workers Compensation). Congress enacted the Longshore and Harbor Workers Compensation Act to provide workers compensation to specified employees of private maritime employers.
The Black Lung Benefits Act, another act set up to decrease workmans compensation fraud, provides compensation for miners suffering from black lung. The act requires liable mine operators to pay disability payments and establishes a fund that is administered by the Secretary of Labor providing disability payments to miners where the mine operator is unknown or unable to pay (Workers Compensation). The Californias Workers Compensation Act provides a comprehensive state compensation program. This program is applicable to most employers.
The statute limits the liability of the employer and fellow employees. California is a state that also requires the employers to obtain insurance to cover potential workers compensation claims, and sets up a fund for claims that employers have illegally failed to insure against (Workers Compensation). The government legislation regarding workers compensation fraud has benefited both businesses and workers by holding the businesses liable when appropriate and offering injured workers proper compensation when necessary. Furthermore, white collar crime is a serious offense that often goes unnoticed.
The term white collar crime was first coined to define upper class criminals now, it pertains to people of all classes and backgrounds who decide to carry out a fraudulent scheme using nonviolent means. Workers compensation is one form of white collar crime that continues to burden businesses, and more importantly, the economy despite much legislation and prevention methods. It costs the taxpayers billions of dollars a yearmore damages than any street drug dealer could ever causeyet, these fraudulent schemes do not receive a penalty nearly as harsh as street criminals.