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California compensation fraud investigations prosper

Newly released figures from the National Insurance Crime Bureau put annual worker's compensation fraud costs at $7.2 billion, or about 20 percent of all worker's compensation payments. With one out of every five dollars paid in compensation being consumed by employee fraud, and competition tougher than ever, businesses' bottom lines have no room for payouts to fabricated claims.

Thankfully, southern California authorities take a proactive, varied approach toward investigating instances of compensation fraud. Speaking from experience, the manager of the State Compensation Fund's special investigation unit recently praised the training that officials receive.

Auditors pay close attention to irregularities and facts that don't add up, sometimes physically visiting both a business's workplace and claimant's home in order to better determine if a claim is legitimate. In one case that revealed a family's fraud earlier this year, agents identified red flags by visiting the location, noticing including a lack of medical appointments and incomplete medical reports, all leading to a falsified injury that was not as severe as claimed and undeserving of compensation.

The State Fund manager noted that fraudsters are becoming more and more sophisticated in their efforts, using the internet to research methods to conduct a false claim, even going as far as to mimic the successful fraud of another at a different business.

While the state of California may be stepping up its investigation of worker's compensation fraud, the legal task of extracting restitution still falls upon the business itself and their legal counsel. When working to truly rectify a fraud an attorney versed in worker's compensation defense can be an invaluable resource.

Source: Insurance Journal, "Profile: Workers' Comp Fraud Expert Takes Old School Approach," Don Jergler, Dec. 12, 2012

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