What You Don’t Know About Workers Comp Fraud (But You Should!)

YouTube Video

What You Don’t Know About Workers Comp Fraud (But You Should!)

Good afternoon, everybody this is Rex Zachofsky, your New York Workers Compensation attorney coming at you today with another live. In this one we're going to be talking about a very popular question that I get all the time: Fraud. Insurance fraud. Workers' compensation insurance fraud. So I wanted to do a live video, answer some questions today from anybody who had any issues, any questions about fraud. So let's get to it, folks.

What is workers' compensation insurance fraud?

Workers' compensation insurance fraud is any material misrepresentation of a fact or an omission. So it's not just a lie, it can also be leaving out important information. And fraud can be met with criminal penalties, so it's something you really want to avoid.

Oftentimes, people are accused of workers compensation insurance fraud—You'll often hear the term Section 114 A violation thrown around, Workers comp is a lot of vernacular, a lot of things that people don't understand in normal English language, so 114 is the term we use. So if you hear 114 being mentioned doing your hearing, they are raising insurance fraud. It's a very big thing and it's only getting bigger.

Insurance companies are using it more and more to their advantage to scare people. And they accuse a lot of people of insurance fraud, workers' compensation insurance fraud, even if they haven't committed it. So you're going to want to stay tuned to make sure that you can avoid these pitfalls, and you can get through your case easily to get the benefits that you deserve.

What are some examples of workers compensation insurance fraud?

So lying about your work status, your current or past work status. Going into court and saying, “Judge, I haven't done any work.” They're going to ask you, the insurance company is going to ask you, the judge might ask you if you've returned to work and if you have, even if it's a light duty, even if it's working for your friend, even if it's just watching your cousin's store, if you have returned to any type of work at all, be honest.

So if you have gone back to work in any capacity and you lie about it, that's insurance fraud. That's a 114 a violation. Whether you went back to work for a few days, and you tried to work, and then you couldn't and you went back out, be honest about it. If you failed to tell them that information, it's going to hurt you.

Passive income is also another area where we've been having some issues with workers' compensation, insurance fraud cases where people have a side business and they are earning benefits or they're earning income and not really working for it, be open and honest about it. Make sure you tell everybody so that it's not used against you down the road. Another area is babysitting.

If you do babysitting work and you're getting paid for it, there's a lot of gray area there because if you're watching your own kids or watching your nieces and nephews, you know, it might not be construed, but always get out in front of it and be upfront with people. Tell them what's going on, tell the judge what's going on. Tell your attorney ahead of time so that they can get it on the record and make sure that you're not accused of of insurance fraud.

Another issue that we run into is being less than truthful about your current condition with the doctors, whether it's your doctor or the insurance company’s doctor, be open, be honest, give them your full effort when you go in for an examination, go through a range of motion testing.

They're going to test your arms, your legs, or whatever body parts you have, give your best effort. If the insurance company’s doctor does not think you're giving your best effort, they're going to accuse you of what's known as malingering or symptom magnification. And that's not something you want to have in your file, because it doesn't look good that the insurance doctor thinks you're giving less than full effort. So make sure you do your best to try to be as upfront and honest about your condition as possible.

And then the third thing is lying by omission. Leaving out information that's important is as bad as telling a lie. So we hear it all the time, “I forgot. I didn't think it was a big deal.” I'd rather you get out in front of an issue, tell them what's going on, and tell the judge and the insurance company all the facts, and get out in front of it and prevent the problem from happening.

What is the penalty for workers comp fraud?

Workers' compensation fraud has a lot of penalties. There are mandatory and discretionary penalties at the workers compensation level. And then there are also possible criminal penalties.

So a mandatory penalty, the period of time and the period of benefits that are attributed to the false information. If you are found to have committed workers compensation insurance fraud, the mandatory penalty is you lose the benefits attributable to the lie. So if you lied and said that you were not working from January 1st to June 1st and they awarded you benefits for that period, and it turns out you lied, you lose the benefits for that period. And that's the mandatory penalty.

There's also a discretionary penalty, and that's up to the judge's discretion and the discretionary penalty, which much more often than not attaches when fraud is found, is complete forfeiture of all monetary awards. You can continue to treat. You can get your medical treatment paid for by the insurance company, but you are not entitled to another dime on your case. If a discretionary penalty is found and basically you lose, you can get your treatment, but you're never going to see a dollar again.

And on top of that, as I said in the slide here, technically you could be prosecuted for a felony. Workers compensation, or any, insurance fraud could be deemed a felony. They could refer your case to a district attorney. You could be arrested and prosecuted. If you are accused of committing insurance fraud, you should be speaking with a criminal attorney. And if you are found to have violated Section 114 of the law, you should certainly speak with a criminal attorney. You don't want to mess with that kind of thing. I'm not kidding.

Who investigates workers comp fraud? And how do they investigate you?

Well, the insurance companies do the investigation here primarily. They're the ones that are looking to catch you. They're the ones looking to avoid paying you. So they're the ones that do the investigation. What are some of the things they look for?

A lot of times the insurance company will compare medical records. They'll compare your doctor's reports to the IME doctor's reports and see if there's any inconsistencies, or they'll compare reports from, if you see different doctors, from your different doctors or even from the same doctor over time to see how things have progressed or regressed. And they look for inconsistencies that they could use against you.

Another thing they do is they conduct surveillance. And people this is one of the things where people talk about it a lot and it happens a lot. They have surveillance. They have investigators who follow you around, and take your picture, and videotape you doing things, and use it against you, trying to show that you are less disabled than you hold yourself out to be when you see the doctors. That you're acting in a way that you otherwise should not be acting, if your disability was as bad as you claim it to be. And they do this and it's pretty common. You need to watch yourself and you need to not do stupid things. But in essence, you really should listen to your doctors and be very careful when you're out there.

Investigators can also, in addition to conducting surveillance, they will also speak to friends and family and neighbors. They'll investigate your social media and things like that. So you really want to be careful. Don't do anything stupid. If you have any question as to whether or not you think you might have done something, or if you think there's surveillance on you, you should certainly speak to your lawyer, or speak to a lawyer if you have not already. Very, very big surveillance.

Listen, insurance companies, if they're spending the money to put surveillance on you, it's very rare that they make a decision that there's not enough there to move forward. They spent the money. They're going to push this case forward and prosecute whether they have a lot of evidence or little evidence. And you want to avoid getting caught up in a fraud allegation.

How can you avoid worker's comp fraud?

Well, we kind of touched on that. The biggest the most important thing is be upfront and honest. Okay? If you have a current case for a back injury and you hurt your back five years ago, tell them about it. If you had a car accident two weeks ago, tell them about it.

If you know any problems that you think might exist. If you get out in front of them and you're upfront and you're honest, they're much, much easier to deal with than if you avoid them. If you fail to disclose a prior accident or a prior injury, especially to the same site of injury that you have as part of your current case, and they find out about it, you're dealing with fraud issues, you're dealing with apportionment issues.

There's a lot of different issues that pop up. Whereas if you were upfront about it and you told your doctor and you told their doctor about it and you mentioned it in court, those problems are minimal and they're very easy to deal with. So the biggest and most important and easiest way to avoid fraud is be upfront, be honest, get out in front of any possible issues or problems.

Don't try to hide anything. Let your lawyer make a decision as to whether or not something is a big deal or not. It's not your call. It's your lawyer's call. They know what's going on. They know the temperature of the board. They know how things are going to be reacted to by insurance company attorneys and by judges. Tell your lawyer, let them make a decision.

Have an open and honest discussion with your lawyer so that it's on the table, they know what they're dealing with, and they know how to move forward. And if you don't have a lawyer and you think there might be a verdict, you really should speak to somebody as soon as possible. Also, don't do anything stupid. Don't be a hero.

You know, it's remarkable how many people with horrible injuries want to make sure that their wife can get to work and shovel their their car out in a blizzard, and they wind up getting caught on tape doing that. And boom, they're dealing with a problem. You know, I know you're trying to do the right thing. We all want to do the right thing.

We want to be chivalrous, or we want to help our neighbors, and we want to do the right thing for people. When you're hurt in your home and you're not able to work, now's the time to be a hero. Let's let the other neighbor be a hero. Call somebody else to come help shovel a friend’s cars out. Be very careful because they're looking.

What should you do if you're accused of fraud?

Okay. Well, like I said, a lot of times there are accusations of fraud. And generally speaking, they don't make those accusations until they have a pretty good amount of evidence against people. But clearly, they accuse people more than people are actually found guilty or responsible of fraud.

The first thing you should do is talk to your lawyer, call your lawyer, have a discussion, have an open and honest discussion. And if your lawyer calls you to go over the facts surrounding this accusation, you know, you really need to give it a lot of thought. And it's remarkable how many times you call someone up and you say, “Look, they have you doing X, Y, Z.” And the people say, “No, that wasn't me, that was somebody else.” Well, don't just dismiss it. It's there. And it's there for a reason.

And it's a it's a pretty big elephant in the room that you want to address. And just because you shoo it away as not a big deal, doesn't mean that it's not a big deal. And it's going to be an even bigger deal if you and your lawyer are not prepared when it comes back up in front of a judge. So go over it with your lawyer.

Go through the facts, go through the accusations. Think back to what you did to make this accusation come to light and go through it. And this way you can address it properly. If you don't address it properly, it's just going to get worse and worse and worse. Like I said before, you want to get out ahead of any problem. Well, here the problem happened. Don't keep avoiding it because it's only going to get bigger and worse as time goes on.

All right, folks, if anybody has any questions, feel free to post them. I'm happy to answer. I see a couple of questions here. If anybody has any questions, please feel free to give me a call. My number is at the bottom of the screen. It's 212-406-8989 If you have any questions at all about any topics, please feel free to give me a call. If you have any fraud questions, please post them here. Hold a few questions you can post on YouTube.

All right. There's a question here. What do I do if workers compensation examiners hold my weekly payment for over a month, could I be entitled to interest? Interest? No. Penalty? Yes. There are regulations regarding payment of workers compensation benefits. They have to pay within a certain time. There is fraud, late payment on timely payment ,or late payment penalties.

So if your payment is not timely, you should discuss that with your lawyer. If you receive the the check makes you make a photocopy because the dates are all in the check it on the stubs, talk to your lawyer, submit those. You might be entitled to a late payment penalty depending on how late your payment is. So that's a that is a very good question.

Off topic, but a great question nonetheless. Thank you very much. What else we have here? What is this? Only fraud comes from workers comp. I don't know what that means. Fraud is fraud, folks. Insurance fraud is insurance fraud. It's not a place you want to be. This gentleman finally got hip surgery done September 5th, going through the healing process at all.

What are you Sorry to hear that. Hopefully. I mean, I'm sure your doctors are aware of this. Make sure your lawyer is aware of this. You know, if you have any consequential problems, consequential injuries as a result of the initial surgery, so long as it was related, you should be entitled to get that treated and and have that covered.

But I hope you feel better. Andre, I just went through surgery myself, so I know what you're going through. All right, folks, that just about wraps it up again. Any other questions? Any other issues? Please? Always feel free to give me a call. My office 212-406-8989. I hope this are clarified some issues with worker's comp fraud. We get calls every day about this.

So if anybody ever has any problems, please let us know and we will come back to you next week with another live. Hopefully we're getting a lot of requests on all sorts of topics. So we have some  other stuff coming your way. Have a wonderful day, everybody.

More videos you might like

Click on one of the YouTube videos below to watch now!

more videos


111 John Street
Suite 1615
New York, NY 10038

phone number



111 John Street
Suite 1615
New York, NY 10038

phone number