DMA Claims Services
Volume 4, Issue 8
BUSTED: Victories for Truth, Justice, and Lower Insurance Premiums

Dude, Where's My Disability Check
by a DMA Investigator, Los Angeles

It is amazing what you can do in plain sight in terms of getting film on Southern California beaches. The subjects who file for disability and then head to the ocean to engage in recreation inconsistent with their claimed injuries do not seem to react to camcorders in their vicinity. Perhaps it is the other tourists on the beach taking film to show friends back in snowbound Iowa that provides the camouflage.

In this instance, the subject, if he noticed at all, may have had dreams of being discovered by the movie industry and coming off disability to a starring role. This guy looked so good after two years of being off work, it seemed impossible that anyone had interviewed him as the payments went on and on.

The subject obviously considered himself completely safe from scrutiny after two years. Our first surveillance resulted in excellent film of more than an hour's worth of cleaning the home garage, complete with bending, lifting and sweeping. A good start.

Coming back on the weekend, I found him on his way to the beach with a surfboard on top of the car. The weather had been warm so fortunately I was dressed for the beach — shorts, Hawaiian shirt and flip flops. I found a good spot on the beach, set down a towel and proceeded to film the ocean while our subject got ready to surf. Once he was out on the waves, he was completely oblivious to me and the film was perfect.

He finally came out of the water and I thought I was done. Good thing I didn't leave because he headed directly for the sand volleyball courts and within minutes, he was diving into the sand to save points, leaping above the net to spike, and generally making the activity of surfing appear to be restful.

I was well and truly sunburned by the time he packed it up. But I had some great film, and this guy's claim was toast. Ultimately the film resulted in a confession in order to avoid prosecution.

The appearance of vibrant good health, a great tan and physical evidence of membership in a well-equipped gym do not normally appear in lists of red flags, but perhaps an addendum would be in order.

DMA Claims Investigator
THE LEGAL ARENA
California Court Rules Workers' Comp Benefits Don't Apply at Conference
by Patricia-Anne Tom of Insurance Journal

In City of Los Angeles v. Workers' Compensation Appeals Board and Lucina Deleon, a California Workers' Compensation Administrative Law Judge ruled that Lucina DeLeon was entitled to death benefits because her husband's death arose out of and in the course of employment.

In September 2005, Jose B. DeLeon fell and died while walking back to his hotel while attending a certified public accountant's convention in Atlantic City, N.J. Lucina was partially dependent on Jose's income, and filed a claim for death benefits alleging that Jose's death was related to him employment as an accountant with the city.

The city of Los Angeles did not require a CAP license for Jose's position. However, the city did pay a 5.5 percent "personal achievement bonus" to accountants with a CPA license pursuant to a memorandum of understanding with the employee's union.

Jose had received the bonus since 1985 when he began working for the city. The city provided mandatory training for its accountants, and some of the training was applicable for maintaining a CPA license.

Lucina believed that because Jose's CPA license helped him to perform his job better and keep him up to date on changing rules and laws, she was entitled to the death benefits. However, the city believed that because the CPA license was not required for the job, Lucina should not receive benefits.

The WCJ concluded that Jose's death was work related and that Jose would not have been in Atlantic City but for the work related need to maintain his CPA license, and awarded Lucinda her husband's death benefits. The city of Los Angeles sought a review of the decision.

The Court of Appeal reversed WCJ's decision. According to the appeals court, because the city did not require or recommend obtaining a CPA license, did not reimburse for classes taken to obtain such a license and offered other training for its accountants, and less than 13 percent of the city's accountants maintained CPA licenses, "clearly, the CPA license was not contemplated by the contract of employment, did not benefit the city by making DeLeon perform his assigned tasks more effectively and was appropriately labeled a personal achievement bonus."

Source: www.insurancejournal.com
WORKERS' COMP NEWS
Raley's managers withhold workers' compensation claims

Managers at Raley's Bel Air supermarket in Roseville were convicted of an unusual kind of workers' compensation fraud last week, according to Amador County District Attorney Todd Riebe, whose office worked with the state Department of Insurance Fraud Division in investigating the case.

The store director and assistant director discouraged store employees from filing rightful claims for injuries sustained at work, Riebe said, by providing cash incentives to get them to use their own health insurance. The managers may have been getting their own kind of compensation out of the deal, at a supermarket chain where annual bonuses rely in part on managers' safety record, according to Armando Zambrano, the deputy district attorney who prosecuted the case.

"It was unusual because it was the employer, and of a large corporation - it's usually the employees (who commit workers' comp fraud)," Zambrano said.

Zambrano is part of a three-person team called the Workers' Compensation Fraud Unit at the DA's office. The unit is responsible for insurance investigations in Amador, Placer and Calaveras counties, according to Riebe, with funds from the state Department of Insurance.

"This case illustrates how our multi-county fraud program investigates and prosecutes all types of workers' compensation fraud," Riebe said in a press release.

Nichole Leddy, 46, of Orangevale, and Amy Theresa Looper, 37, of Roseville, pled no contest on Dec. 11 to a count of insurance fraud in violation of Insurance Code Section 1871.4(a)(3), a misdemeanor, the release noted. Leddy, the store director, was sentenced to 45 days in jail with three years formal probation. She was ordered to pay a fine of $13,500 to the California Workers' Compensation Fraud Account for future investigations.

Looper received a similar sentence but was ordered to pay $2,500 to the fraud account. Both defendants are eligible for alternate sentencing, according to the release, and are required to perform 360 hours of community service.

The investigation started after an anonymous phone message at the state department turned officials' attention to store No. 512, Zambrano said. Six employees came forward with similar complaints. Investigators found evidence of employees who were offered cash payments and paid days off for their silence, according to the release.

One injured employee received $200 from the store fund to cover co-payments for private health insurance coverage. Another employee was instructed to go to her family doctor and falsely say the injury happened at home instead of at work.

"That … is part of workers' comp fraud," Riebe said.

Raley's is a privately-owned supermarket chain with headquarters in West Sacramento. The company is comprised of four chains - Raley's, Bel Air Markets, Nob Hill Foods and Food Source.

Anyone who has been injured at work and discouraged from filing a workers' compensation claim can report it to the state fraud division at (916) 854-5700 or the DA's fraud unit at 223-6562.

Source: www.ledger-dispatch.com

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