Workers' Compensation Fraud

If you've been charged with California workers' compensation fraud, the repercussions of a conviction would be severe. You increase your chances of getting a positive result in your case by hiring an experienced criminal defense attorney. We at Darwish Law in Santa Ana have successfully defended clients accused of workers' compensation fraud, so we know how to develop a solid defense strategy that could work for you. Our extensive knowledge of California law and intimate experience with the local Santa Ana court system gives us an edge over the prosecutors.

An Overview of Workers' Compensation Fraud Under California Law

California's workers' compensation insurance policy is intended to reimburse employees who are injured at work or while doing job-related tasks elsewhere. It's intended to help struggling families get through a difficult period by providing aid for both medical treatments related to a job-related accident as well as making up for lost income to some extent.

Workers' compensation fraud occurs whenever an employee files a claim for compensation they are not eligible for under the requirements of California's workers' compensation laws. This occurs when they willfully provide false, inaccurate, or misleading details to deceive the workers' compensation system and acquire financial advantages for themselves. Employers could also commit workers' compensation fraud by falsifying information to deny injured employees the benefits they are entitled to. In California, several different statutes address worker's compensation fraud. These are listed below:

California Insurance Code (IC) 1871.4

California IC 1871.4 is the fundamental law addressing workers' comp fraud. If you provide a fraudulent or false substantial representation or statement with the intent to seek or receive workers' compensation payments, you could be charged with fraud under this act. It's also unlawful to submit or influence the submission of an intentionally false or fraudulent written or oral material statement opposing or supporting an application for workers' comp claims.

You could be charged with the offense if you deliberately abet, aid, or collaborate with someone to perpetrate worker’s comp fraud. It's also prohibited to create or influence the creation of a deliberately false statement about eligibility for compensation to deter an injured employee from submitting a valid claim for compensation.

This law defines a worker's compensation benefit as any type of insurance plan that employers must pay for. If an employee gets hurt while doing his or her duty at work, the private insurer compensates the employee for temporary disability and medical expenses. This type of disability benefit includes payment for lost earnings from the moment the employee is out of work while healing from the wounds or illness sustained.

The employee could have sustained serious injuries, rendering him or her unable to return to work following the incident. In this situation, the insurance provider compensates the employee for the permanent disability. Workers often pass away from illnesses or injuries sustained at work. In this situation, the insurance provider pays the employee's children, spouse, or other beneficiaries. Workers' compensation claims are subject to limitations under California law.  For example, an employee who sustains injuries at work can't sue his or her employer or supervisor in a California civil court.

The law defines the numerous methods by which a false representation or statement can be made. The claimant could make fraudulent statements or representations, either orally or in writing. Other ways to make false statements include providing false proof of harm, notice, bills of services, X-ray test results or falsifying tests, and forging documentation of legal or medical expenses.

You can also make false statements about the payment for services received or any proof of expense,  injury, or loss. The law considers any statement or representation to be material if it's reasonably important to the inquiry of the workers' compensation claim. A statement or representation is relevant if it has an important or direct effect on the investigation or appraisal of the compensation claim.

  • False or Fraudulent Statements

California law describes a false or fraudulent statement in this context of fraud as any remark or declaration made that's untrue. A statement is considered fraudulent if it hides relevant facts with the intent of inducing an individual to take action to his or her detriment.

Applicants for compensation could make false statements by faking illnesses or exaggerating the severity and nature of their injuries. False statements could also include failing to report previous illnesses, or injuries or claiming that an injury you sustained is job-related whereas it isn’t true.

Employees could risk fraud charges if they receive benefits from several employers for the exact injury. It's also illegal for an employee to take part in double-dipping. This refers to the practice of receiving benefits from workers' compensation while also engaging in illegal employment.

California Penal Code 550

Provisions of PC 550 define several categories of workers' comp fraud that often overlaps with healthcare fraud. It's a crime under California PC 550 to knowingly create or influence the creation of a false or fraudulent claim to help in the settlement of healthcare coverage provided by California workers' comp insurance.

It is illegal to file a case for a healthcare benefit granted by workers' comp insurance that the claimant does not use. Submitting multiple claims for payment of the same comp health benefits are also considered fraud.

The execution of workers' comp fraud under California PC 550 isn't limited to employees or applicants. This type of fraud is often committed by physicians and other healthcare professionals. Healthcare professionals who provide treatment funded by workers' comp insurance could perpetrate this type of crime.

California Penal Code 549

A business owner or employer would be subject to fraud charges under California PC 549 if he or she accepts, solicits, or refers any business entity from or to any person or business. Charges could be brought up if the defendant knew that the other party intended to commit fraud.

Chiropractors, doctors, and other healthcare professionals are often charged with workers' comp fraud under California PEN 549. These health professionals could be involved in bribery or kickback schemes designed to cheat the workers' comp scheme.

What the Prosecution Must Prove

Prosecutors must prove the following to secure a conviction on workers' comp fraud charges:

  • The defendant submitted an incomplete, false, or deceptive claim to the workers' compensation insurance program
  • That the accused knew that the claim was false or fraudulent in some way
  • That the accused intended to profit financially from the claim by cheating the workers' compensation program of unjustified payments

These benefits include:

  1. Ongoing and immediate medical attention
  2. Temporary disability benefits to compensate for lost earnings while you recover
  3. Permanent disability payments are provided to individuals who are permanently not able to work as a result of a work-related accident
  4. Death benefits are provided to the family of a person who lost his or her life in a work-related injury

Since California workers' compensation insurance is a no-fault system, the prosecution would have no interest in attempting to prove that the workers' compensation beneficiary falsified information about the party responsible for the accidental injury or loss of life. However, there may be false claims based on where the injury occurred, as it must have occurred on the work site or while doing job-related tasks.

The statements in question can be details provided on the application for a workers' compensation claim or remarks made verbally to support a claim. Supporting documentation including hospital records, medical bills, X-ray results, and evidence of lost wages can also be included.

The alleged statements could be fraudulent for several reasons, including:

  • The injury is not real
  • The injuries sustained are not job-related
  • The injuries were not as expensive or severe as claimed
  • Previous injuries were not reported
  • There was no disclosure of previously filed claims
  • A similar claim was made against several employers
  • The accused worked while receiving workers' compensation benefits

Many workers' comp fraud cases would rely on the element of intent and whether the false or fraudulent statement was relevant. To be found guilty of workers' compensation fraud, you should have intended to commit the offense rather than make a mistake. Furthermore, any false statements—even those that are made knowingly—must have the potential to influence the value or approval of the claim.

Possible Penalties for Workers' Compensation Fraud

Workers' comp fraud, to a large extent, can be charged as a felony or a misdemeanor, based on the details of the matter, the actual amount of the claim, as well as the accused's past criminal background, if any.

Workers' comp fraud is often penalized by up to twelve months behind bars for misdemeanor-level offenses and up to two years in state prison and hefty fines for felonies. However, depending on whatever law was broken, separate consequences apply, as follows:

California IC 1871.4 Infringements

It’s a wobbler offense to violate CIC 1871.4 by engaging in workers' comp fraud. The prosecuting attorney could choose to pursue the crime as a felony or misdemeanor based on the facts of the claim as well as your criminal background.

The punishments for perpetrating workers' comp fraud can also include a probationary period for a misdemeanor offense. The court could sentence you to up to a year behind bars. The court could additionally issue a hefty fine of 150,000 dollars or twice the amount of the crime, or whichever is higher.

The courts would order you to compensate the fraud victims. Giving restitution to fraud victims means compensating them for whatever losses they may have sustained as a result of your fraudulent actions.

If the prosecution decides to file felony charges, the consequences would include formal probation. While you’re on formal probation, you would be subjected to probation conditions such as meeting or reporting to your assigned probation officer regularly.

You would also be subjected to 2, 3, or 5 years behind bars under the California realignment program. The court would also impose hefty fines ranging from $150,000 to double the value of the fraud amount whichever would be greater.

You can be required to provide compensation to the fraud victim, just like if you were found guilty of a misdemeanor.

Violations of California PC 550

According to California Penal Code 550, the crime of worker's comp fraud is similarly a wobbler. The penalties for misdemeanor charges under Penal Code 550 include summary probation or up to a year in jail. Additionally, you can be required to settle a substantial fine of up to $10,000.

Completing felony probation is one of the punishments for felony charges. Under California's realignment program, the court could sentence you to 2, 3, or 5 years in jail. You could potentially face a fine not exceeding 50,000 dollars or twice the sum of fraud, or whichever is greater.

Workers' comp fraud always counts as a misdemeanor when the overall sum or amount in the fraud is valued at 950 dollars or less; the court puts into consideration the accumulated claims over twelve months when determining the value of the crime. In California, the consequences for this kind of crime include a maximum of six months in jail. You could also bear fines of up to $1,000.

Violations of Section 549 of the Penal Code

Workers' comp fraud under Penal Code 549 is considered a wobbler for the first violation if it is committed by receiving, soliciting, or promoting a business while knowing that an individual or company plans to perpetrate fraud. You will be charged with a crime under Penal Code 549 if you commit workers' comp fraud for another time.

In California, the penalties for a misdemeanor violation include a maximum of a year in jail. The court has the authority to levy a heavy fine of 50,000 or twice the sum of fraud, or whichever is larger. A felony charge can result in a sentence of Sixteen months, 2 years, or 3 years behind bars.

Additionally, you can be required to pay fines of up to 50,000 dollars or twice the sum of fraud, or whichever is higher. In addition to the statutory fines indicated above, health care practitioners who commit workers' comp fraud face professional consequences.

When a nurse, doctor, pharmacist, or any other healthcare provider commits fraud for monetary benefit, it is deemed "directly linked to" their principal credentials as healthcare workers. As a result, a guilty verdict for workers' comp fraud may cause the professional licenses to be suspended or revoked indefinitely or maybe for a set length of time.

Civil Penalties

For a workers' compensation fraud offense, you could also face civil fines in addition to any jail time or fines that could have been imposed under criminal statutes.

Most often, the same circumstances that result in a criminal charge for workers' compensation fraud also subject the defendant to the civil consequences below:

  • Fines ranging from 4,000 dollars to 10,000 dollars for each reported fraudulent claim
  • A fine that might be up to 3 times what workers' compensation insurance paid you in legal and/or medical costs in connection with a fraud charge
  • An additional 4,000 dollars per service is charged for people who have previously been convicted under Penal Code 549 or California Insurance Code (CIC) 1871.4

Possible Legal Defenses

Below are examples of defenses your attorney can employ to successfully contest your workers' comp fraud claim:

No Knowledge

It's possible that even if you produced factually inaccurate records, especially if you served as a secretary or another type of assistance, you had no idea they were false. Nevertheless, you may also face fraud charges alongside your employer or the actual perpetrator. In this situation, your lawyer will fight tenaciously to have the charges against you dropped or dismissed.

No Intention to commit Fraud

In many cases, even though you deliberately filed a claim with inaccurate information, you might not have intended to defraud workers' compensation. It might have been merely an error on your end. This sort of human misunderstanding happens all the time, and a skilled defense lawyer can show you're innocent.

Fraudulent Information Not Relevant

You cannot be found guilty of fraud even when you deliberately provided inaccurate statements on a claim request for workers' compensation if such information was not significant to obtaining a claim or raising the value of the claim.

Not Enough Evidence to Convict

The evidence used against you could often be difficult to understand and quite complicated. By its immense scale, it may appear impressive, but that might not satisfy the standard of evidence.

Contact a Santa Ana Criminal Lawyer Near Me

Due to the complexities and severity of workers' compensation fraud allegations under California statutes, you might find it hard to defend yourself before the court. If you are being investigated for fraud, you’ll need a skilled criminal defense attorney on your side. We at Darwish Law have a track record of achieving successful results in a variety of welfare fraud cases, and we'll be able to put up a strong defense in your case. Contact us at 714-887-4810 to speak with one of our knowledgeable attorneys.