Table of Contents

1. Workers’ Compensation

2. Workers’ Compensation Claim

3. Workers’ Compensation Fraud

4. 6 Signs of Workers’ Comp Fraud

5. Workers’ Compensation Fraud Investigation

6. FAQs on Workers Compensation Fraud Investigation

If you’re here we’re sure you are interested to know the details about the workers compensation fraud investigation. Before we get there, let us understand what exactly is a worker’s compensation fraud.

Workers’ Compensation

Workers’ Compensation is the benefits that the injured worker will receive for his liabilities caused at the workplace.

Now, what liabilities are we talking about here?

In this context, “liabilities” refers to the financial losses and health impairments experienced by the worker. This primarily encompasses various elements such as lost wages for days when the worker was unable to work, fees incurred for appointments with an attorney, and expenses accrued to cover medical bills.

Workers’ Compensation Claim

A Workers’ Compensation Claim protects both the employee and his employer.

If a worker sustains an injury while performing their job responsibilities, they have the option to file for a Workers’ Compensation Claim. Workers’ compensation is designed to compensate for their losses, encompassing various aspects such as covering the expenses related to medical treatments and providing death benefits when applicable.

As an employer, you benefit from several legal protections under the Workers’ Compensation Law. It’s mandatory for you to obtain a Workers’ Compensation License, especially if your business employs individuals. Failing to comply with this requirement can result in felony charges. However, there might be exceptional situations where an employee could circumvent the Workers’ Compensation Claim system and potentially file a lawsuit against their employer, especially if the employee believes that the employer intentionally caused harm.

Workers’ Compensation Fraud

Workers’ Compensation can be a lifeline for workers injured on the job. It can keep them afloat financially until they are ready to get back to work. But money can corrupt even the noblest of men and the only reason why most people do jobs is so that they can make money.

It’s no surprise that not all of the employees have their company’s best interests at heart. Everyone is looking to make more money and if being morally flexible sometimes is what it takes then people would do it without hesitation.

Workers’ Compensation is strictly meant for workers who have lost their ability to earn but people try to exploit the system by faking injuries. And that is essentially what Workers’ Compensation Fraud is.

Lying or misrepresenting an injury in order to obtain Workers’ Compensation benefits constitutes Workers’ Compensation Fraud. Shockingly, approximately 1 in every 10 Workers’ Compensation Claims in California is believed to be fraudulent. This deceit results in millions of dollars in taxpayer funds being wrongfully claimed by individuals who are not entitled to these benefits, while those genuinely injured face unwarranted challenges.

In recent years, this form of fraud has proliferated extensively, akin to a pervasive plague, resulting in an estimated annual cost of $10 billion for taxpayers to cover these deceitful claims. Workers’ compensation fraud stands as the foremost category among insurance fraud cases.

Cathy Cashwell’s case gained attention after her appearance on “The Price is Right.” Despite claiming $3,000 per month due to an on-the-job shoulder injury, which allegedly limited her physical abilities, she was seen on the show engaging in activities that contradicted her reported restrictions, such as jumping, running, and spinning a giant wheel. This incident garnered public scrutiny and highlighted issues related to potential Workers’ Compensation Fraud.

6 Signs of Workers’ Compensation Fraud

After a Workers’ Compensation Claim is filed, there are a few things that are straight red flags for the workers’ compensation insurance companies:

1. There are no witnesses who can corroborate.

2. Employee’s refusal to undergo medical diagnosis.

3. Inconsistencies in the employee’s description of the incident

4. The employee is hard to reach while he is ‘out injured’

5. The employee has filed for a claim just after being terminated

6. There has been evidence of an employee doing something, that would have been impossible in case of his ‘claimed injury’

The last point is where most workers’ compensation frauds are busted. Most workers try to fake injuries like back pain or mental trauma where it is not easy to determine if the injury really exists. Even if the workers are injured, they might try to exaggerate the extent of the injury to gain long-term workers’ compensation benefits.

Workers’ Compensation Fraud Investigation

The rising number of Workers’ Compensation Frauds has led to the insurance companies taking extreme steps to uncover workers’ compensation fraud. Workers Compensation fraud investigation can include anything from stalking their social media accounts to secretly making videos of them.

The very first thing that the insurance companies do is to ask workers compensation fraud investigation questions to the claimants and if they are not convinced then they hire private investigators. And these private investigators are usually willing to take things far. The task assigned to them is quite simple but not easy. They have to gather any shred of evidence against the worker that proves his injury otherwise. The injury for which he is bagging the workers’ compensation benefits.

Here are a few things that private investigators do to uncover workers’ compensation frauds during their workers compensation fraud investigation:

1. Video Surveillance

This is perhaps the most obvious aspect that would cross a person’s mind, even if they weren’t a private investigator hired by an insurance company. However, as much as this might seem obvious, it also stands as one of the fastest methods to catch workers’ compensation fraudsters in the act. Considered a brute-force approach by private investigators, it often leads to resounding success.

If an individual is receiving workers’ compensation benefits for a purported back injury that restricts their ability to stand for prolonged periods, walk long distances, or lift weights beyond a certain limit, they are expected not to engage in such activities. Private investigators capitalize on this expectation. They position themselves discreetly with hidden cameras near the residence of these supposedly injured workers or follow them to various locations, keeping them under constant surveillance. Sooner or later, these individuals are likely to perform actions that contradict their reported injuries, thereby potentially exposing the fraudulent claims. This tactic is a staple in the playbook of workers’ comp private investigators.

Several intriguing examples exist:

A nurse, receiving workers’ compensation benefits due to back pain that allegedly limited her from lifting anything exceeding 10 pounds, was captured on camera lifting a ’40-pound bag of dog food into a shopping trolley. Subsequently, she unloaded this bag into her car after pushing the trolley.

Another case involved a worker who was filmed helping a friend move a refrigerator, all while claiming workers’ comp wages due to a reported ‘severe back pain’.

The case of Daniel Farny (1997)

This is one of the more popular cases which happened at a time when Workers’ Compensation Frauds were at their peak. This eventually led to workers’ comp investigation being carried out with more strictness in California and new laws added to the Workers’ Compensation Act.

The 33-year-old veteran of the Oceanside Fire Department and a 3rd-year law student, Daniel Farny was living on workers’ compensation money set at ‘50% of his salary for life’ equivalent to $700,000. According to Farney, he ‘suffered a back injury so debilitating’ that he ‘could not even work a desk job’.

But the insurance company was not convinced and they hired a private investigator named Ted Koerner who went as far as tailing Farny to Hawaii where he was on an exotic vacation with his family.

And this is one of many things that Ted Koerner captured in a video footage which destroys Farny’s workers’ compensation claim – lifting 3 stuffed bags of luggage (in the picture), giving a piggyback ride to his daughter and jumping around at the beach.

Koerner went so close to Farny that he even eavesdropped on Farny at a dinner table where he confessed his fraud by saying, ‘I guess when we get back there it will be time for me to start having back pain again’.

This case gives an insight into workers comp private investigator rules. Which are none. They have no rules. These investigators are willing to go to extreme lengths to uncover suspected claims frauds and what Koerner did here is just everyday workers compensation surveillance video insurance fraud investigation.

This case just sums up workers compensation investigations and what they look for.

2. Social Media Hunting

It’s an intriguing coincidence that the rise of social media occurred during the zenith of Workers’ Compensation Fraud, offering fraud investigators a vast platform to enhance their investigative methods. Monitoring the social media profiles of suspected claimants has become an integral part of their strategy.

Private investigators meticulously scrutinize the social networking activity of suspected individuals, often focusing on the images they post or appear in. In some cases, investigators even send friend requests to suspects on platforms like Facebook. A single photo that contradicts a worker’s claim can unravel the entire case; for instance, a worker complaining of breathing issues due to workplace passive smoking is photographed holding a cigarette.

In a notorious case involving Vincent LaMantia, a former cop accused of falsifying workers’ compensation claims, incriminating evidence was found on the Facebook account of Jennifer LaMantia, presumably his wife. The location tag on a photo placed LaMantia in Cigombong, Indonesia, a renowned tourist spot—a contradiction to his claimed condition. Furthermore, another image showed LaMantia boasting about a second job while receiving workers’ compensation for PTSD.

These images provided compelling evidence that dismantled Vincent LaMantia’s case. The essence is clear: fraud investigators possess keen observation skills, and uncovering fraudulent claims through evidence from social media barely scratches the surface of their investigative prowess.

Surveillance for workers’ compensation insurance fraud investigations and monitoring social media profiles represent only the initial phases in the repertoire of Workers Comp Fraud Investigator Jobs. Investigators employ various techniques such as conversing with neighbors and relatives, conducting comprehensive background and record checks, and in extreme scenarios, embedding themselves within the claimant’s social circle while in undercover roles.

Today, with technological advancements, the use of workers’ compensation fraud detection software and even artificial intelligence for predictive modeling in detecting workers’ compensation fraud is becoming increasingly prevalent. Tools like Klear.ai showcase the capabilities of advanced AI in detecting claimant fraud in Workers’ Comp through its sophisticated detection software.

FAQs on Workers Compensation Fraud Investigation

Q1 – How to report Workers’ Compensation fraud?

Ans – There is usually a centralized hotline number for every state where people can report potential Workers’ Compensation Frauds anonymously. Call: 1 800 795 4451

Q2 – What are workers comp investigators allowed to do?

Ans – There is no definite word on what they are allowed to do but they can do anything that gets them evidence to kill the claim. It includes things like:

– Put suspects under surveillance, video or microphone, without their prior knowledge

– Stalking their social media accounts

– Talking to their closed ones

– Doing background checks of their records and personal life

The line is drawn where they start to breach the suspect’s right to privacy or the stalking takes the form of harassment. That is something they are not allowed to do.

Q3 – Is workers comp fraud a felony?

Ans – It is the worst type of insurance fraud and yes, it is a felony.

Q4 – What is the most common type of worker compensation fraud?

Ans – Sprain or pain, usually in the back or shoulder, is the injury for which most fraudulent claims are made. 1 in 4 people in California thinks that it is ok to defraud their employers.

Q5 – How long does the Workers’ Compensation Fraud investigation take?

Ans – It can take any amount of time from days to even years. Some fraudsters are more careful than the rest and they know what they are doing. It also depends on how motivated the PIs are and if lady serendipity is with them.

Workers’ Compensation Fraud is like a plague and it is committing a crime by exaggerating a claim of disability against one’s employer. It is a felony. Workers’ Compensation Fraud investigators are often successful in catching the culprit but for every one person caught, thousand of others slip through the cracks. Klearai Native AI Fraud detection system is built ground up to automate workers comp fraud investigation and reduce the time and costs involved investigating a workers compensation fraud.