Fraud in workers’ compensation cases can come in many forms. It can come from workers faking injuries, malingering, falsely reporting the source or severity of an injury, or a variety of other systems. In addition, employers or even medical providers may be involved in perpetrating fraud. In recognition of how damaging fraud can be to both employers and employees, as well as the state at large, California created the Workers’ Compensation Fraud Program in 1991. The legislation also created the Fraud Assessment Commission.
The Fraud Assessment Commission was created to help apportion funding. Its purpose is to allocate funds to fraud prosecutors across the state of California. Members of the FAC are appointed by the governor of California. The members serve for four years, or until the governor decides to appoint a replacement. Currently the FAC is made up of seven members. Four represent self-insurers, insured employers, and workers’ compensation insurers. Two represent organized labor. The final member is the President of the State Compensation Insurance Fund, who is granted permanent membership. The FAC meets 3-4 times a year in Sacramento. The FAC is also responsible for creating methods of funding so that prosecution of fraud can continue. Insurers are required to report potential fraud to the proper authorities, and insurance fraud is a felony in California.
The funding for the Workers’ Compensation Fraud Program that is ultimately apportioned by the FAC comes from California employers. During 2014-15, the fraud division found and reported almost 6,000 cases of suspected fraud, and 240 arrests were made with 197 cases referred to prosecutors. The potential loss came to the total of $277,032,462.
District Attorneys also have a Workers’ Compensation Program. In 2014-15, they were responsible for 740 arrests, and prosecuted over 1,400 cases, resulting in over 700 convictions. Over $32,000,000 was ordered in restitution. The total amount of chargeable fraud was almost $650,000,000. Unfortunately this represents only a small amount of the fraud that actually occurs. As should be clear from this brief explanation and these statistics, investigation into fraud is essential to helping to protect the working people of California from further financial damage.
I have extensive experience dealing with cases involving fraud. If you believe your business is being faced with a workers’ compensation claim that may be fraudulent, contact me today at (714) 516-8188 to talk about your options.