The system set in place to compensate workers after an injury in the course of running work-related tasks often faces exploitation from fraudulent users. Over the years, many workers and employers have been found guilty of engaging in several forms of fraud as they tried to obtain extra cash from the set compensatory amount. While the compensation scheme is available to benefit injured workers in need, citizens regularly engage in several voluntary activities that include presenting false information, documents, and other statements to gain additional money from the authorities responsible for dispatching the workers’ compensation.
However, despite the numerous accusations that defendants face for fraud involving workers’ compensation, you may find yourself wrongly accused because of a misrepresentation of facts, among many other possibilities. Therefore, it is essential to seek immediate legal assistance from an experienced criminal lawyer, to avoid the severe penalties issued to any party involved in the fraudulent acquisition of workers’ compensation. We at the Orange County Criminal Lawyer are ready to take on your workers’ compensation case, to help you raise persuasive and valid defenses in court. Thanks to our many years of practice in criminal defense, you can expect excellent legal guidance and court representation to ensure that you do not face a conviction for an offense you were not involved in.
Understanding the Use of Workers’ Compensation
Seeking monetary compensation under the workers' compensation category is exclusive for employees who sustain injuries while at work when undertaking work-related activities. Therefore, you need to meet several criteria before gauging eligibility for the compensation, including the presentation of proof that your injuries arose from tasks performed in the course of fulfilling professional duties. The workers' compensation system operates under an insurance cover that offers several services to any injured employee to help the affected person throughout seeking medical treatment and staging out of work. Thus, if you qualify to receive worker’s compensation, your employer will use the insurance policy to cater to your:
Medical Costs
After a severe injury, you will need to undergo medical examinations and emergency treatment to alleviate pain from the injuries you suffer. Moreover, medical expenses may accumulate from the medication, therapy sessions, and surgeries that your doctor may recommend, on top of receiving in-patient treatment. As a result, your employer should include the total medical costs when submitting a report to the insurance company responsible for paying your workers' compensation fee.
Acquired Disabilities
Moreover, if you sustain severe injuries that result in a permanent disfigurement from amputation or paralysis, you will face temporary or permanent physical impairment. The workers' compensation amount should be enough to cater to your needs.
Wrongful Death Benefits
The survivors of an accident victim can also make claims for worker's compensation if the deceased suffered injuries and death in the course of work. The benefit should be enough to provide for the survivors for a reasonable time, based on the deceased’s life expectancy and working capacity.
Since the terms of requirement state that employees must face any of the listed outcomes and damages from a work-related injury, you may find yourself providing false or exaggerated information concerning the personal injuries, leading to fraud. Moreover, the scam may be motivated by the restrictions present that prevent you from using your employer in a civil case for compensation. You already have your workers' compensation benefits in place.
Consequently, the limited options often push aggrieved accident victims to seek additional compensation using different types of workers' compensation fraud. Engaging in fraud means that you present false information to help you attain certain benefits that you are not otherwise eligible to receive. Fraudulent actions also involve using pretenses and statements to make another person believe you and provide benefits that you otherwise do not qualify for. The types of fraud that are prohibited by the California Penal Code are:
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Applying for Workers’ Compensation and Health Care Benefits for the Same Incident
Section 550 of the California Penal Code prohibits employees from applying for double benefits by seeking workers' compensation and health benefits offered by the California Health Benefit Scheme for injuries sustained in one work-related accident. The regulation exists to prevent employees from acquiring extra benefits, as it prevents other aggrieved persons in need of the health benefits from accessing the funds. Thus, the prosecutor handling your case will have several crime elements to prove before you face any conviction. It is important to note that being guilty of any of the listed activities under section 550 of the Penal Code will lead to a successful conviction. The three different fraudulent actions that amount to workers compensation fraud under this section are:
Presenting More than One Claim For the Payment of Health Care Benefits and Workers Compensation
In this scenario, your primary offense will be to defraud authorities responsible for providing compensation benefits by making multiple applications to receive monetary compensation for the same injury. In doing so, most defendants will engage in creating fake reports to help you make various applications for the same benefits. The prosecutor must provide sufficient evidence to show that you created false identities, or worked closely with an officer who handles claims in ensuring that you received multiple benefits for the same injuries. For example, if you were injured at work and filed for healthcare benefits and workers' compensation under your name, then used your brother’s and friend’s identities to register for the same claims again, you will be guilty of fraudulent operations.
The second element for the prosecutor to prove is that you had a deliberate intention to defraud the relevant authorities and receive multiple benefits. The prosecutor should show that your actions included specific knowledge that your operations were illegal —some sources of evidence to prove this stem from your activities before and after receiving the benefits illegally. For example, suppose the prosecutor gets hold of information showing transactions across different bank accounts to cover your tracks after obtaining the money. In that case, he/she can prove that you were trying to avoid attention from taxation authorities because your actions were illegal.
Additionally, your intention to defraud may show any prior arrangements you made with third parties to steal innocent people’s information to create additional accounts that would be eligible for the compensation and health benefits.
Making Fraudulent Claims to Receive Health Care Benefits Provided by Your Worker’s Compensation
Ideally, your workers' compensation amount should cover all medical expenses and benefits you need to make a full recovery, providing adequate financial support for other situations like loss of wages, earning capacity, and wrongful death. Therefore, the insurance company providing the workers' compensation will include similar healthcare policies, identical to those available in Health benefit covers. The idea is to prevent duplication of claims that can be consolidated under one insurance scheme exclusively for employees.
Consequently, making fraudulent claims to help you earn benefits from both covers amounts to illegality, as it exploits the compensatory system. For example, if you present claims to cover for physiotherapy services under the workers' compensation insurance policy and present the same request under the Health Care Benefits system, you are guilty of the offense.
Nevertheless, the prosecutor should prove that you are responsible for formulating the identical claims. You knowingly ordered for their presentation to the two different compensation schemes or did it yourself. To do this, the prosecution team must gather enough evidence from your computer or cellphone to show that the claims came from your end. Sometimes, the prosecutor may also check your transaction records to verify whether you received money from the Health Care Benefits account and the worker’s compensation account. If there is sufficient evidence to serve as proof, the prosecutor’s claims may succeed.
Lastly, you should note that you may still be a party to the offense by aiding or abetting another person to create any of the fraudulent information listed above. Thus, the prosecutor may present accusations against you even if you did not receive the monetary benefits directly, as long as he/she demonstrates that you were a party to the crime.
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Violating Regulations Under Section 1871.4 of the Insurance Code
Apart from the regulations set out in section 550 of the penal code, the insurance code offers additional provisions that prohibit any activities linked to workers' compensation fraud. Under section 1871.4, the statutory provision gives four different activities that will amount to fraud and consequently lead to your conviction, if found guilty. In all four scenarios, the underlying criminal element is that you must have performed your actions knowingly, meaning that you were aware of the fraud involved in such operations. They include:
Creating a False Statement of Entitlement to Benefits to Discourage an Injured Employee From Seeking Compensation
Mostly, the employer will be the first respondent in such a case. It involves providing the employee with false information concerning the benefits that he/she can receive under the scheme. Several motivating factors may make the employer resort to this fraudulent operation. The main reason for such an engagement would be to avoid scrutiny and criticism from the workers' compensation insurance company, as the policies available require the employer to take responsibility for the mishaps that occur.
Additionally, the employer may have intentions to apply for the workers' compensation on behalf of the injured client, but retain a significant amount of money based on the misrepresentation he/she provides to the employee. For example, if your employee is entitled to a $10,000 compensation fee, you may give the person false information that the actual figure is at $6,000, aiming to retain the extra $4,000. Alternatively, you may manage to discourage the employee completely and embezzle his/her compensatory amount in fraudulent transactions.
Often, the prosecutor will work with the affected employee to obtain sufficient evidence against you. Therefore, your criminal lawyer should expect witness testimonies, written reports, and even audio recordings proving that you were directly involved in lying to your injured employee to defraud him/her.
In proving that you provided the fraudulent information knowingly, the prosecutor may scour your documents and personal computer history to show that you had researched the actual workers' compensation benefits available for your employee and withheld it from the injured worker.
Making a Fraudulent Representation or Statement to Provide or Deny Workers Their Compensation Benefits
Any employer who makes or orders for the making of a fraudulent statement that is influential in providing or denying his/her injured employee the chance to receive workers' compensation benefits is also guilty of the offense. In this case, you will be liable for manipulating the information used by the assigned insurance company to determine the validity of the employee’s claims. As an employer, you will also be able to manage the employee’s information before submitting it to the compensation insurance company, aiming to grant or deny the person compensatory benefits.
A regular statement or representation from your injured employee will contain documents that prove injury from doctor reports or diagnosis forms. Images from CT-scans, MRI scans, and X-ray imaging also form part of the employee’s representation or statement. They provide additional information on the nature and severity of the personal injury. Moreover, you may also receive medical receipts from all the services that the employee underwent to back the claims presented when applying for workers' compensation. In some cases, you will also have written notices from the affected employee stating that he/she will be unable to continue working because of the injuries, which also influences the final amount provided by the compensation insurance company.
Upon receiving these documents, you may decide to change the information or omit some records before presenting them to the insurance company, depending on the motive behind your actions. Suppose you aim to benefit the injured employee based on an agreement to share the benefits. In that case, you may exaggerate the prices on certain medical expenses, or even get someone to change the medical reports, to amplify the severity of the injury. On the other hand, when your goal is to try and prevent your employee from receiving compensation benefits, you may omit the receipts of services acquired or withholding crucial documents like X-ray images and doctor reports to discredit the employee and the seriousness of the matter.
During the trial, the prosecutor will have to prove the specific fraudulent activities you engaged in, to confirm that your role was consequential on the employee receiving benefits. Thus, the compensation insurance company may send one of their representatives as a witness to present the information they received concerning the injured worker, to be used in comparison with the reports filed by the employer.
It is also common for the employee to have worked with his/her employer, especially when they are both working to secure fraudulent gains. In that situation, you will be tried alongside the employee, who may end up providing corroborative evidence to show that you were both involved in the crime. Based on the circumstances of the workers' compensation fraudulent operations, the prosecutor may need to prove additional elements of the crime. For example, he/she should show whether you involved the insurance company in taking bribes or coerced your employee to provide statements or representations according to your specifications to benefit your illegal scheme.
Presenting a Fraudulent Material Statement to Support or Prevent a Worker from Receiving Compensation
Since an employer holds a higher position of authority in the workplace, the insurance company providing workers’ compensation may request a private meeting with you to confirm that the worker’s claims are reasonable and valid. In this case, the insurance company will request material statements or representations that provide additional information on the applications, to help the insurance company complete their claim investigations. As a result, what you say matters, as the insurance company will consider your representation to make a final determination on whether or not to grant the employee workers’ compensation.
Consequently, if you provide information that could lead to the denial of rightful compensation to an injured worker, you will be guilty of fraudulent misrepresentation that hinders the employee from seeking compensatory benefits. The prosecutor will be keen on reviewing written or oral statements provided to the insurance company to derive evidential sources that prove your fraudulent misconduct. Additionally, witness statements and audio recordings will contribute to the prosecutor’s evidence if such resources are available, as he/she tries to prove your guilty intentions when giving the material representation or statement.
Aiding or Conspiring With Another Person to Engage in Presenting Fraudulent Statements
Suppose you are arrested for conspiring with another person or aiding and abetting such a person to present fraudulent statements that amount to workers’ compensation fraud. In that case, you will also be guilty of the offense. In this case, you should note that you will be guilty of criminal activities even if you only engaged in a conspiracy and not the actual commission of the fraudulent activities. Subsequently, the prosecutor may benefit from the provision because all he/she may need to prove is that you conspired with another. Usually, a conspiracy involves making secret plans to engage in fraudulent activities, albeit later. Therefore, the prosecutor will only need evidence to show that such plans were in existence at the time of the arrest.
In other cases, you will have aided and abetted another party in the fraudulent activities to submit false statements to the employer. Several actions may amount to aiding or abetting the other party. For example, if you help the person by lying or exaggerating the severity of their injuries to help him/her access more monetary compensation than required, it amounts to the offense.
Moreover, helping these people to fake injuries by providing a cast, bandages, or even creating fake medical images and scans to present to the employer is also considered offensive. You may be guilty of aiding and abetting the main party to the crime even if you work in a different company, as long as the information you help to formulate is useful to the offender. For example, if you are a radiologist who creates fake images for a friend to use in filing compensation claims, you will face similar charges.
Penalties for Engaging in Workers’ Compensation Fraud
When the prosecutor successfully proves your involvement in any of the forms of workers' compensation fraud discussed, the judge will render a guilty verdict and proceed to issue punishment for your actions. The penalties you will be subjected to depend on the type of fraudulent activities you engage in and the total amount you managed to deceive from the compensating insurance company.
Punishment for Offenses under Section 550 of the California Penal Code
Suppose you engage in any of the fraudulent activities listed under section 550 to obtain workers’ compensation illegally. You will face charges for a wobbler crime, meaning that you could either get misdemeanor or felony charges. As a misdemeanor, the judge may sentence you to a $10,000 fine or a maximum sentence of one year in county jail. Alternatively, you may face felony punishment on probation, whereby you may face two to five years in county jail, a $50,000 fine, or mandatory payment of twice the amount you obtained from the fraud. The judge will choose between the higher amount of the two options.
Penalties for Offenses Under Section 1871.4 of the Insurance Code
The crimes under this section also amount to a wobbler crime. A felony conviction attracts two to five years in county jail, or a $150,000 fine or doubles the amount obtained fraudulently, depending on the higher amount. You will also have to pay restitution to the affected person, mainly your employee, to deny workers’ compensation using fraudulent means.
As a misdemeanor, you will face up to one year in county jail or a $150,000 fine and payment of restitution to the affected party.
Defenses for Engaging in Workers’ Compensation Fraud
Your criminal lawyer will prepare several defenses for the charges you face, to help you evade conviction, or reduce the severity of penalties issued significantly. Some of the possible arguments for the offense include:
Insufficient Evidence to Convict You
Your lawyer can disprove the prosecutor’s claims, primarily if they are mostly founded on speculation, as the case requires proof beyond any reasonable doubt before you face conviction. Therefore, insufficient evidence means that the prosecutor’s strategy is not strong enough and can lead to an unlawful sentence.
Ýou Did Not Act Intentionally
Since your knowledge of acting fraudulently is the main element for the prosecutor to prove, your defense attorney can dispute it by showing that you were unaware that the documents you presented or helped prepare were to be used in fraudulent operations.
It is crucial to reach out to your criminal lawyer. He/she will help create an opportunity to build on additional defenses based on your case’s unique circumstances.
Contact a Criminal Fraud Lawyer Near Me
Facing charges for fraudulent actions may be detrimental to your career and personal life, mainly because of the harsh penalties issued for the offenses. The situation is even harder to cope with when you face false accusations that could lead to severe consequences. Getting in touch with the Orange County Criminal Lawyer ensures that you have access to the best criminal defense services in Orange County, California, as you prepare to face trial. With our skilled and professional attorneys, you will have a smooth litigation process guaranteed to deliver a favorable case outcome. Call us today at 714-262-4833.
