Workers’ Compensation Fraud

Workers’ compensation fraud has been on the rise in California for the past several years. You are at risk of severe punishment if you are accused of this kind of offense, as detailed by the California laws. The Los Angeles Criminal Defense Attorney will aggressively defend your rights by trying to get the best possible results out of your workers’ compensation fraud case. 

How Workers’ Compensation Fraud is Defined in California

In California, several laws address issues related to workers’ compensation fraud. All these laws are meant to safeguard the rights of employees working within California and ensure that they get compensated as required once they are injured in their workplaces. Here are the laws that deal with workers’ compensation fraud in California. 

Insurance Code 1871.4

Insurance Code 1871.4 is the principal statute that deals with workers’ comp fraud in California. The legal definition of this statute is as follows:

• You knowingly made or caused a fraudulent or false material representation or document to obtain or deny workers’ compensation benefits
• You deliberately caused or presented a deceptive or misleading oral statement to support or oppose a workers’ compensation benefit claim
• You knowingly aided or conspired with anyone to commit an act of workers’ compensation fraud

It is easier to understand the statute if you look at it in detail. Here is a closer view of some of the elements that rise from the description.

1. Worker’s Compensation Benefit

Workers’ compensation is a private insurance policy that requires companies within California to reimburse their workers if they are injured within their workplaces. The kinds of benefits that workers should be paid include:

• Medical care
• Temporary disability, which provides payment to reimburse the lost wages if a worker cannot work while recovering
• Permanent disability, which should reimburse all lost wages if a worker cannot work gain after an accident
• Death benefits, which is a form of payment to a worker’s dependents such as his or her spouse and children if he or she succumbs to work-related illness or injuries

Please note, injured workers cannot seek compensation by suing their employers in civil courts. However, with the workers’ compensation claims, an injured worker does not have to prove that an injury was a result of someone else’s fault. This makes it a no-fault system. 

2. Representation or Statement

A representation or statement can be explained as :

• A bill of services
• A written or oral statement made by the claimant
• Proof of injury
• A notice
• X-ray test result
• Proof of medical costs
• Doctor’s or hospital records
• Any other evidence that proves loss, payment, injury

3. Materials that Prove Statement or Representation in Workers’ Comp

A statement can be considered as material if it conveys details on subjects that are reasonably or germane to the investigation of your claim by the insurer and would be relevant to the investigation of the claim. 

4. False of Fraudulent

A fraudulent or false statement is an untrue or statement that conceals material facts that induce someone to act detrimentally. In workers’ compensation fraud, a defendant can make false or fraudulent statements in the following way:

• Making misleading statements to fraudulently securing an increased workers’ compensation benefit
• Falsifying or misleading information about your salary to deny or diminish your rightful benefit
• Conspiring with fellow workers to commit any form of workers’ compensation fraud
• Submitting false medical expenses, whereas you did not incur any accident
• Submitting several medical claims for the same injury
• Presenting injuries more severely more than they were to get a more significant claim
• Double-dipping for a work-related injury that never occurred or for a service that you did not offer
• Collecting workers’ compensation benefits while you are working, whereas you are expected to attend to your injuries

Please note, workers’ compensation fraud is not limited to workers, but employers can also be involved in fraudulent activities. Some of the common ways that employers are required in workers’ compensation fraud are as follows:

• Giving a bigger number of employees affected by workplace injuries to gain from the excess amount
• Providing wrong details about the nature of an employee injured within their premises
• Lying about the extent of benefits to an employee to deter him or her from submitting a compensation claim.

Apart from Insurance Code 1871.4, other California statutes address issues to do with workers’ compensation fraud. These laws are as follows:

Penal Code 550

PC 550 describes different forms of workers’ compensation fraud in California. These types of frauds usually overlap with California health care frauds and describe these crimes in the following way:

• Knowingly making or causing a false payment claim of a health care benefit covered by the workers’ compensation insurance
• Knowingly submitting a health care benefit claim which falls under the workers’ compensation insurance which the claimant did not use
• Knowingly presenting several claims for payment of the same workers’ compensation healthcare benefit to defraud the insurer

In most cases, employees are involved in violating Penal Code 550. However, medical professionals are also engaged in violating this statute since they are involved in treating workers intended to benefit from the workers’ compensation scheme. 

Penal Code 549

Under PC 549, an employee or business person can commit a workers’ compensation fraud by doing the following:

• Accepting, soliciting, or referring business to or from another person or entity
• knowing that that the person or entity intends to commit a workers’ compensation fraud

This kind of fraud is usually charged against healthcare providers such as doctors and chiropractors involved in commercial bribery designed to take advantage of the workers’ compensation scheme.

Penalties for Workers’ Comp Fraud in California

In California, anyone alleged to have committed a workers’ compensation fraud can be charged under Insurance Code 1871.4, PC 550, and PC 549. Let’s have a closer look at the penalties that an alleged offender would face while charged under any of the statutes related to workers’ compensation fraud. 

Penalties Under Insurance Code 1871.4

Criminal charges for workers’ compensation fraud under Insurance Code 1871.4 are considered as a wobbler. This means that you can either face a misdemeanor or felony charge based on the circumstances surrounding your charges and your criminal history.

If you are charged with a misdemeanor, the possible penalties that you face include:

• Summary of misdemeanor probation
• A maximum of one year in county jail
• A maximum fine of $150,000 or double the amount involved in your fraudulent activity, whichever is found to be greater
• Restitution to any victims affected by the fraud

If you are charged as a felony, the possible penalties that you face are as follows:

• Formal or felony probation
• Two, three, or five years sentence in county jail under the California realignment program
• A maximum fine of $150,00 or double the amount involved in the fraud, whichever is found to be greater
• Restitution to any victims affected by the fraud

Penalties Under PC 550

If you are charged under PC 550, your fraudulent activities are probably related to healthcare benefits. Violating PC 550 is a wobbler and the potential penalties for a misdemeanor include:

• Misdemeanor probation
• A maximum of one year service in county jail
• A maximum fine of $10,000

If you are charged with a felony, the potential penalty includes:

• Felony probation
• Two, three, or five years of service in county jail
• A maximum fine of $50,000 or double the amount involved in the fraud, whichever is found to be greater

There is an exception that applies if the total amount involved in the fraud is $950 or less if there is an aggregate claim for a period within twelve consecutive months.

In such a case, violating PC 550 becomes a misdemeanor with the potential penalty of a maximum of six months of service in county jail and a maximum fine of $1,000. 

Penalties Under PC 549

Charges for workers’ compensation fraud under PC 549 are considered as California wobblers. However, if you are being charged for a subsequent offense, the charges become a felony.

If you are facing misdemeanor charges, the possible penalties include a maximum of one year in county jail and a maximum fine of $50,000 or double the amount involved in the fraud depending on which is higher. 

If you are facing felony charges, the potential penalties include 16 months, two years, or two years in county jail, and a maximum fine of $50,000 or double the amount involved in the fraud, depending on which amount is higher. 

Professional Discipline for Workers’ Compensation Fraud in California

California healthcare professionals such as doctors, pharmacists, and nurses accused of their involvement in workers’ compensation fraud should be worried about professional disciplines that might befall them.

California doctors facing this type of allegation or substantially related to their duties, functions, and qualifications can lead to professional discipline. Most forms of workers’ comp fraud fall under this category and can lead to severe consequences. For instance, nurses and pharmacists can end up having their licenses revoked once they are proved to be involved in specific types of workers’ compensation frauds.

Civil Penalties That Result from Workers’ Comp Insurance Fraud

Under California laws, there are hefty fines that come as a result of certain workers’ compensation fraud. These fines apply when the liable parties do the following:

• Willfully misrepresent facts to obtain workers’ compensation insurance at a lower cost compared to the rightful rates (employers usually commit this kind of fraud)
• Knowingly presenting or causing false statement in opposition or support of workers’ compensation benefits to obtain or deny those benefits
• Knowingly soliciting, receiving, offering, paying or unlawfully rebating, commission for referring or asking clients to services that fall under workers’ comp insurance
• Knowingly operating or participating in a service that refers patients to services under the workers’ comp to gain profit
• Conspiring or assisting someone in fulfilling any of the above-stated fraudulent activities

If you are involved in any of the above activities, the potential penalties include:

• A civil penalty between $4,000 to $10,000 for every illegal compensation you have made, and
• An assessment that can amount to three times the amount that the workers’ insurance company made as a result of the fraud.

If you were previously accused of workers’ compensation fraud under PC 549 and Insurance Code 1871.4, you are at risk of an additional civil penalty of $4,000 for every service or item related to your fraud. 

Legal Defense for Workers’ Compensation Fraud Charges

The California Department of Insurance has invested heavily in uncovering fraudulent claims. Therefore, if you are charged with deceitful workers’ compensation activities, a special investigation and a lot of effort will be placed to ensure that you are successfully convicted.

The best way to avoid a successful conviction is by hiring a professional criminal attorney. Once you hire an attorney, he or she should prepare legal defenses to win your case. Below are a few relevant legal arguments that your attorney can present. 

Lack of Knowledge, Fraudulent Knowledge, or Intent

You cannot be considered guilty of workers’ compensation fraud unless you knew your statements or behaviors were fraudulent, and you intended to do so. Sometimes a careless mistake might be flagged as a possibility of fraud, and an insurance investigator reports it to the authority. If you are in such a situation, you can disapprove of the allegations by proving that you had no fraudulent intention with your actions.

Remember, the prosecutor has a burden of proving beyond reasonable doubts that you were intentionally involved in fraudulent activity. Therefore, if your attorney can help you determine that you had no intention of engaging in fraudulent activity, the court will be obliged to drop your charges.

Insufficient Evidence

There are complicated facts that surround any case related to workers’ compensation. Sometimes these allegations are highly technical and would conflict with different pieces of evidence such as doctors’ reports and medical diagnoses. Therefore, a prosecution team might decide to take ambiguous and complex evidence unjustly. With a thorough investigation of the evidence presented by the court, you can find weaknesses and prove that you were innocent of the allegations. 

Police Misconduct

As much as law enforcement officials are custodians of the law, some are involved in misconduct. In most cases, police misconduct occurs when law enforcement officials violate your constitutional right or negatively use their authority to engage in fraudulent activities. Common forms of police misconducts include:

• Unlawful search and seizure
• Failure to read Miranda rights during an arrest
• Planting evidence
• False statements during prosecution

If your attorney can prove any of the above-stated misconducts, you will have a suitable legal argument. However, this might not make you entirely innocent of the allegations but would make the court reduce your charges.

Entrapment

In some cases, some people are trapped in some form of offenses without their knowledge. One of the most common types of entrapment is blackmail. Someone might have something against you, forcing you to engage in some form of workers’ compensation fraud for your benefit. If you can prove that your involvement in the alleged fraud is a result of entrapment, the court will have no other choice but to drop your case. 

Coercion

Coercion is a different form of entrapment that involves threats and a higher official. For instance, a police officer might coerce you into engaging in workers’ compensation fraud to benefit in one way or another. In most cases, the official might have threatened you or your family member to force you into committing a fraudulent action. If you can prove to the court that you were coerced into doing the alleged fraudulent activity, and you have no other choice but to do so, the court might decide to drop your charges.

Please note that you have to prove beyond a reasonable doubt that you could not resist the threats to make this argument valid in court.

Mistaken Identity

The term alibi is usually used to describe a situation where someone is mistaken to have committed an offense, whereas he or she is not the actual perpetrator. Mistaken identification typically happens when the real perpetrator resembles another person who is arrested for the allegations at hand.

 If you are in such a situation, you must provide enough evidence that you are not the actual perpetrator. The best way to do this to provide proof of your whereabouts while the offense was being carried out. You can use evidence such as receipts, camera footage, witnesses, and phone call records to prove your whereabouts.

Prosecution Misconduct

Other than the different types of misconduct that law enforcement officers are engaged in, the prosecution team can also engage in some form of misconduct in one way or another. Prosecution misconduct is referred to as an illegal act or failure to act as a prosecutor, especially when attempting to sway the court or jury to convict a defendant unjustly.

It is hard to trace such types of misconduct, but if your attorney can manage to prove this, you will have a valid legal argument to rely on.

Crimes Related to Workers’ Compensation Fraud in California

Particular crimes are either charged along, or in place of workers’ compensation fraud in California. Here is a detailed view of these crimes. 

California Penal Code 487: Grand Theft

Grand theft auto is one of the crimes that overlaps workers’ comp fraud in California. One is accused of violating this statute by unlawfully taking property worth $950 or more. Cases related to workers’ comp fraud often meet the description of theft by pretense, which is a form of grand theft auto.

Violation of PC 487 falls under California wobbler crimes. If you are charged for a misdemeanor offense, the potential penalty includes a maximum of one year in county jail. If you are convicted for a felony offense, the possible penalties include felony probation, which consists of a maximum of one year in county jail or 16 months, 2 or 3 years in county jail.

If you are found guilty of committing a grand theft auto using a firearm, the offense is considered a California felony. The potential sentence includes 16 months, 2, or 3 years in the state prison.

Penal Code 470: California Forgery

PC 470 defines forgery as a crime that involves:

• Signing another person’s name or fictitious name
• Counterfeiting or forging a seal or handwriting of another person
• Altering, falsifying or corrupting records of any legal will, judgment, or codicil
• Falsely making, altering, counterfeiting, or forging documents such as bonds, money orders, or bonds

Violating Penal Code 470 is a California wobbler offense. If you are prosecuted for a misdemeanor, the possible punishment includes:

• Misdemeanor or summary probation
• A maximum of one year in county jail
• A fine of up to $1,000

If you are charged with a felony,  the possible penalty include:

• A formal or felony probation
• A maximum of three years in county jail
• A fine of up to $10,000

Please note, your charges will be considered a misdemeanor if you forged a money order, check, or a similar instrument worth $950 or less. 

Penal Code 118: Perjury

An offender is considered to have committed perjury if he or she deliberately gives false information while under oath. You can end up with a perjury charge if you knowingly lie while in deposition or a formal declaration during a workers’ compensation fraud investigation.

Any convictions under Penal Code 118 is considered as a California felony offense. The possible consequences that follow are:

• Custody in the State prison for a maximum of four years
• A fine of up to $10,000

Please note, the judge might award you with felony probation in place of your prison time. 

Find a Workers’ Compensation Fraud Attorney Near Me

There are serious consequences that might befall you if you are successfully convicted of workers’ compensation fraud in California. At The Los Angeles Criminal Defense Attorney, we have the experience needed in defending workers’ compensation fraud. We will put all our efforts into getting the best results out of your allegations. For more information about us, contact us at 310-564-2605 for a free legal consultation.