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Family members sometimes defraud employers

In today's struggling economy, it can be difficult to run a profitable business. Market share and other large-scale economic factors can lead to financial difficulties, leaving California business owners scrambling to cut costs wherever possible. In some cases, employees act to intentionally defraud employers, placing an even greater strain on a company's operations. Even worse, the party who would seek to defraud an employer is sometimes not even the employee, but a family member.

One recent case making headlines across the state involves a wife who continued to collect worker's compensation payments after her husband died. The husband was entitled to monthly payments of more than $18,000. The man suffered a terrible brain injury when he was involved in an industrial accident in his workplace. He fell from scaffolding while on the job, and was declared brain dead in 1997.

His wife was made his legal guardian, and assumed responsibilities for directing his worker's comp case. Within the eventual settlement, she was required to notify the insurance company when her husband passed away, at which point the payments would cease. Instead, however, she continued to collect the payments after her husband's death in 2010. She has since been charged with two counts of felony insurance fraud, and is facing prison time and fines.

This story is illustrative of the fraud that is often associated with California worker's compensation. While most cases revolve around employees who seek to defraud employers, there are instances in which it is the family members of an employee who exploit the system. Such cases are a drain on both employers and the insurance companies who provide worker's compensation coverage. This story also speaks to the need to remain vigilant in regard to checking into existing and lending worker's comp cases.

Source: Insurance Journal, Wife Nabbed For Allegedly Cashing Dead Hubby's Workers' Comp Checks in California, No author, Sept. 9, 2013

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