Claimant found guilty of fraud in workers’ compensation case
Case Study

Claimant found guilty of fraud in workers’ compensation case

August 27, 2019

An auto-parts store employee who filed a successful workers’ compensation claim over a lower-back injury he sustained in November 2014 has had his benefits rescinded and made to pay a penalty for failing to disclose he had been enrolled in college full-time while collecting benefits and also had been in a motor-vehicle accident.

The claimant’s fortunes began to turn in June 2018, when Goldberg Segalla special counsel Andrew R. Arbeit, an experienced litigator who has defended clients against workers’ compensation claims for more than a decade, successfully argued the man had committed fraud.

Andrew has experience managing every aspect of workers’ compensation claims. He reviews case facts, speaks with adjusters and employers, analyzes the circumstances of alleged injuries, and uses relevant case law to reach successful resolutions for his clients. He is a member of Goldberg Segalla’s Workers’ Compensation practice group, whose mission is to achieve significant and sustainable reductions to the overall expense of each client’s workers’ compensation program.

With his argument that the claimant in the auto parts-store case had committed fraud, Andrew scored a half-win. A workers’ compensation-law judge, at a hearing in November 2018, agreed and assessed the mandatory penalty, rescinding benefits the man had received from April through November 2018, and giving the store a seven-month credit for benefits paid. But the judge did not assess a discretionary penalty, leaving the claimant entitled to ongoing benefits and a future permanency award.

Both sides then filed appeals and rebuttals and then Andrew successfully argued for the claimant to be denied a spinal cord-stimulator clinical trial and continued negotiating a settlement.

However, in August 2019, with settlement negotiations stalled, a Workers’ Compensation Board panel modified the judge’s decision and increased the mandatory penalty period to 10-plus months. Finding the claimant’s conduct “deliberately deceptive and misleading,” the panel also assessed a discretionary penalty, barring the claimant from receiving lifetime benefits from his established claim.

“The foregoing facts demonstrate a pattern of deceit on the part of the [c]laimant that merits the discretionary penalty of permanent disqualification,” the panel noted.

If the decision holds, the claimant never will receive another dollar for indemnity benefits in the case. He will continue to have coverage for relevant medical bills. But Andrew’s client can bring an action against him for the 10-month period of the mandatory penalty, possibly recovering about $15,000.