Another Employer Fraud Scheme And Another Arrest

A Kentucky woman extradited to New York now faces serious workplace injury fraud charges, but are these kinds of cases the real problem in what many say is a broken system?

According to New York State Inspector General Catherine Leahy Scott, 47-year-old Sheryl Colson, of New Concorde, began receiving her mother’s workers’ compensation checks in 2011, because the self-insured Orange-Ulster Board of Cooperative Educational Services did not verify the former nurse’s death. Prosecutors allege that Ms. Colson, who controlled her late mother’s estate, cashed $400 monthly checks from January 2011 to January 2013, using the funds to pay bills, eat out at restaurants, and buy “products from an Indiana company specializing in the production of hand-blown glass pipes and other smoking devices.”

In a statement, Ms. Leahy Scott condemned Ms. Colson’s “morbid abuse” and vowed that she would “protect the critical benefits that are meant to assist honest, hard-working New Yorkers.”

Workplace Injury Employer Fraud

Cases like this one almost invariably make the headlines. One of the most notorious incidents in recent memory occurred in 2009, when a postal worker collecting workers’ compensation payments for an alleged shoulder injury that left her unable to lift mail trays appeared on “The Price Is Right” and spun the “big wheel” twice.

But statistically, employer fraud costs injured workers much more than worker fraud. One Texas study pegged employer fraud costs at twenty times worker fraud costs. Most states do not prosecute workplace injury employer fraud cases very enthusiastically, and even if cheating employers are caught, their punishment is normally only a fine that may not eclipse the money they illegally saved. Some common fraud schemes include:

• Job Misclassification: To reduce their insurance premium payments and therefore take money out of the system, some bosses claim that high-risk employees, such as construction workers, are in low-risk positions, such as secretarial work.
• Worker Misclassification: Similarly, some employers classify all their workers as “independent contractors” to avoid paying premiums at all.
• Illegal Payments: Many bosses promise to pay injured victims’ medical bills “under the table” if they agree not to file workers’ compensation claims. So, even though the workplace may be unsafe, the employer pays nothing extra into the system.

Some employer misconduct is so bad that it entitled victims to sue outside the workers’ compensation system and obtain additional compensation for their noneconomic damages. Civil lawsuits are also possible if the workplace injury involved a negligent co-worker or a defective product.

Employer fraud greatly reduces the amount of money available to injured workers. For a free consultation with an experienced workers’ compensation lawyer in Franklin, contact Attorney Gary S. Logsdon. We do not charge upfront legal fees in workplace injury matters.