Protect Yourself Against Charges of Fraud

    Several clients have sought our counsel on charges of workers’ comp. fraud during the last few years. Sometimes these charges have arisen in situations where the clients did not suspect that their activities could be seen as fraudulent. I represented some of these clients in administrative hearings, but I did not represent them in any criminal cases. I was also asked to advise some on the ramifications of a finding of fraud for their workers’ comp. claims. I relate these cases below in an attempt to warn unwary Federal workers’ comp. recipients.

    Many OWCP clients have reported they were the subjects of surveillance. Some were receiving wage replacement benefits while others were on light duty on the job. Sometimes the surveillance was conducted by agents of the employing agency, and other times it was conducted by private investigation firms. Although Federal employers have the right to investigate suspected fraud, clients often report behavior of investigators which borders on harassment.

    In one case, the client had a serious physical injury. The only way to take the edge off of her significant, constant, pain was to take large doses of pain medications. The injuries she suffered and strong pain medications she took, made her unable to perform useful work. Her husband provided the main support for the family through his operation of a business enterprise. Once or twice a month, the claimant’s husband would ask her to deliver documents to clients of the business. She was never paid for doing this and she did not report this activity to OWCP. Someone reported to OWCP that the client said she was a part-owner of the business. This prompted an investigation. The claimant was ultimately prosecuted criminally and convicted of workers’ comp. fraud because she helped her husband in his business and failed to inform OWCP. Her sentence involved time in prison, a large fine, restitution of money paid for benefits, and a life-time bar to any future OWCP benefits. The couple will probably lose their home and end up in bankruptcy, and the claimant will carry a felony conviction for life.

    We have also represented clients before the Merit Systems Protection Board in removal cases where employing agencies attempted to fire employees for various offenses which amounted to claims of workers’ compensation fraud. These cases were sometimes cast as failure to promptly report injuries, lying to the employees' doctors, or knowingly filing false official government forms. We have had good success in refuting such charges in most cases.

    These cases show that Federal agencies, including the Postal Service, aggressively investigate and prosecute workers’ compensation fraud and failure to report work activities. They are motivated to do so because they must reimburse OWCP for the workers’ comp. benefits received by their employees. Recipients of such benefits should make sure they know the rules governing reporting of their activities and comply with them. In addition, they should be careful not to exceed the restrictions placed on their activities by their physicians. Otherwise, they may be subject to administrative and criminal sanctions which can be most severe.

    Don't Be the Victim of Intimidation
    In previous cases, supervisors as well as agency investigators have used the threat of potential prosecution for fraud as a deterrent, in an effort to prevent injured workers from filing a claim or to get them to drop an existing claim altogether. This type of harassment is illegal, and any person who coerces an injured employee to forego filing a legitimate claim is in direct violation of the law, and could face prosecution with potential imprisonment. Additionally, it is unlawful for agency representatives to contact an injured employee's physician, either by telephone or personal visit.

    In spite of these employee protections, this kind of harassment happens often. Agency investigators carrying badges and firearms have marched into doctors' offices making baseless allegations of employee fraud, dropping hints that the doctors themselves are being investigated, and that through their medical care and documentation they are somehow involved in fraud. Many doctors are unprepared for these allegations and are not used to interacting with investigators. If left unchallenged, this sort of intimidation could undermine the impartiality of the doctor's medical assessment and ultimately complicate the injured employee's ability to file a legitimate claim.

    If an injured employee finds themselves to be the subject of an agency investigation, including surveillance, interrogation, or threat of prosecution, it is imperative for them to seek legal advice from a licensed attorney. Employees should never submit to any interrogation which pertains to alleged fraud or any other alleged criminal offense without first consulting an attorney.