Our firm will be the first to admit the world of workers’ compensation can be a pretty rough business sometimes. Fraud can be found anywhere, or in any line of work for that matter. One of the first things we do as a firm is to vet the story and take a good hard look at whether our client has reasonable cause to claim benefits. This helps to further the case, protect our client and to be perfectly honest, protect our firm as well. We prefer a level playing field. We are 100% committed against fraud of any kind. Unfortunately, we play against some pretty big hitters. In 16” Chicago softball lexicon, they are called ringers. They hit the long ball. Count on it. Well, the insurance industry has a few big hitters and ringers of their own.
Just last year, American International Group, Inc., AIG, agreed to pay seven insurers $450 million to settle a long-running case over an alleged $1 billion workers’ compensation under-reporting scheme. It seems certain individuals at AIG deemed it was worth the effort to engage this tactic…until they were caught and fined.
Too often, the public has been led to believe that people injured in work accidents are regularly taking advantage of the system. Shows like 20/20, Dateline and similar newsmagazines have run exposes’ on this topic a number of times. But one of the more under-reported topics is the fraud that the insurance industry foists on the public at great cost to us, the taxpayer and even to other members of their own profession.
Here is another example: After the state of New York hit Compensation Risk Managers, an outside administration company that monitored self-insured trusts, with a $400 million lawsuit, the company filed for bankruptcy, leaving the state with no perceived option than to go after the businesses that paid into the trusts. The businesses say they are the victims in this fraud, which totals almost $1 billion. Only $48 million has been recovered so far.
There are countless other stories as well. It doesn’t need to be a huge mega-corporation or insurance provider. Small business owners are constantly charged and found guilty of under-reporting payroll to fraudulently and to substantially reduce their company’s workers’ compensation insurance premium. An Ohio woman was convicted of fraud for failing to maintain workers’ compensation insurance coverage to protect her employees. Eight claims were filed against her policy during the time in which she was operating a business under a lapsed policy and she currently owes approximately $73,000 in past due premiums, in addition to non-compliance claims costs.
In one sense, none of this is surprising. In another sense, it is disheartening. Cheaters and those who commit fraud chip away at the base of an imperfect but well-meaning system of fairness. It doesn’t matter which side of the case they are positioned.
At Capron & Avgerinos, we are committed to helping our clients receive the most fair and the most just settlement or resolution to their case possible. For more information, go to: www.capronlaw.com or call us at 312-364-6444.