Workers’ Compensation Fraud Case Highlights Value of Investigators

This week, a Scarborough man was sentenced in federal court to five months in prison followed by five months of home confinement for concealing self-employment income while receiving federal wage-replacement workers’ compensation benefits. The man, a former United States Post Office driver, had been collecting weekly benefits since 2001, was required to file annual forms certifying that he was not working. In 2012 an undercover agent caught him operating a long-haul car transportation business on a cash-only basis.

This case is far from unique in the workers’ compensation field. Particularly in a rural state like Maine where seasonal, cash-based work is common, workers fraudulently collecting wage loss benefits sometimes feel safe in supplementing their income through undisclosed work. Hints or suggestions that an employee may be involved in such fraudulent activity can come from a variety of sources: the employer, social media, newspapers, and even anonymous sources. But we often rely on private investigators to confirm the fraud and obtain the proof needed to litigate or prosecute. A successful investigation could save an employer tens of thousands of dollars in weekly benefits, and occasionally will give an employer the ability to recoup benefits collected through an employee’s fraud. Occasionally, as here, such a case will even result in criminal sanctions.

Whenever an employer or insurer suspects fraud or misrepresentation in a workers’ compensation case, it should consider the use of surveillance and other investigative methods. A relatively small investment in investigation could result in significant savings.