Trust is a key component of building a prosperous business. It’s vital to develop trust between business owners and their vendors, suppliers, communities, and customers. But arguably the most important area of trust is between the business owner and his or her employees, since it usually takes a team effort to achieve success.
Which is why it can be so disheartening when it is revealed that a worker has breached the trust of his or her employer.
Workers Compensation Fraud
There are a number of different types of fraud for which a business owner must be watchful. From vendors padding invoices and motorists staging collisions with company vehicles to customers fabricating slip-and-fall accidents, plenty of shady characters are always looking for a way to swindle a business owner out of his or her money. But another all-too common type of fraud occurs when employees fake on-the-job injuries in order to obtain insurance monies or workers’ compensation payments.
How it Happens
Here are some of the types of fake injury scams that employees have attempted in the past in order to obtain worker’s compensation payment and/or paid time off from work:
- A person gets hurt outside of work hours, but lies by saying that he or she received the injury while on the job.
- A person sustains a very minor injury at work, but exaggerates the extent of the damage to his or her body.
- A person has a recurring injury which has been present for years, but tries to claim that it was caused while at work.
- A person suffers an on-the-job injury and stays home well after he or she has recovered enough to return to work.
- A person simply fabricates an injury and claims that he hurt himself/herself while at work.
Partners in Crime
In some cases, these fake workplace injury scams are aided by outside individuals who often take a cut of the ill-gotten monies. For example, medical care professionals may inflate the seriousness of an injury or make up other injuries sustained by a patient. Then they’ll bill insurance companies for unnecessary or phony treatment. There are even some lawyers who file bogus lawsuits against businesses and their insurers with the hopes of earning a quick “no questions asked” settlement.
Fake Employee Injury Case Study
One recent case in New Jersey illustrates how someone can try to bilk businesses and insurance companies. Earlier this month, Vinny Curbelo was indicted on numerous charges including insurance fraud, health care claims fraud, and theft by deception. Curbelo is accused of lying down next to a patch of ice in the parking lot of the car dealership where he worked in 2011, and then claiming he fell and injured his back. In reality, he had hurt his back four years ago while unemployed. Before his scam was discovered, he had collected over $55,000 in disability payments from the dealership’s insurer, and had received medical treatment valued at more than $527,000. In addition, Curbelo took another job at an auto body shop while collecting these benefits. He could receive between five and ten years in prison for his crimes.
How to Combat Fake Employee Injuries
So what can a business owner do to protect his or her company from being victimized by this type of fraud? Here are some suggestions:
- Do whatever you can to make your workplace as safe as possible, including placing floor mats in moisture-prone areas, instituting safety protocols around heavy machinery, and making workers wear protective goggles, hard hats, or other equipment when appropriate.
- Carefully screen all job applicants for evidence of past fraudulent activities.
- Stress the importance of combating workers’ compensation fraud to all of your employees.
- Institute a zero-tolerance policy for this type of fraud – and mete out stiff consequences if it ever does occur.
- Instruct your employees on precisely what to do if they see or suspect workers’ compensation fraud.
- Provide rewards or incentives for employees who bring this type of fraud to your attention.
- Report all on-the-job accident claims to your insurer immediately.
- Alert your insurance companies about any workers compensation claims that you feel are suspicious – even if you don’t have any direct evidence of fraud.
Fake employee injury scams have wide-ranging consequences. These claims lead to higher insurance premiums for businesses, which in turn raise company expenses. Sometimes, business owners have to raise prices and/or reduce staff in order to cover the increased costs. That’s why it’s essential that business owners keep their eyes open for signs of workers’ compensation fraud.
Written by Chris Martin