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Fraud Doesn’t Pay In New York – February 2023 Update


Fraud Doesn’t Pay In New York – February 2023 Update

Another Overview of Recent Decisions, Demonstrating the Board’s Continuing Attitude Toward 114-a.

Key Takeaways:

  • WCL 114-a provides the board with the authority to disqualify a claimant from receipt of lost time benefits, “[i]f for the purpose of obtaining compensation pursuant to section fifteen of this chapter, or for the purpose of influencing any determination regarding any such payment, a claimant knowingly makes a false statement or representation as to a material fact.” Section 15 is specific to lost wage replacement.

  • It is important to note that medical benefits remain open but should be questioned in the litigation process.

  • While surveillance is key, communication among all parties is crucial to obtaining a strong mandatory and discretionary finding. We recommend to our clients who feel a claim is not progressing, or have any indication of suspicious activity, to coordinate with our team.

EDITOR’S NOTE — (As part of our quarterly practice-group update, we are pleased to produce our sixth installment of examples showing our continued success in the area of fraud litigation. This publication began as a one-time update, however, due to the consistent success of our dedicated attorneys we are very pleased to be able to continue to relay our successes.)

The board has consistently broken down the severity of violations into essentially two categories; mandatory and discretionary. The mandatory penalty correlates to the number of weeks, equivalent to what we are able to definitively prove. This typically runs from the first date of surveillance, or the first date we can prove an inconsistent statement, through to the date of the judge’s decision. The longer the period and scope of the evidence, the longer the mandatory period.

The discretionary period is based on a standard of “egregiousness.” While there is no specific formula, this can be proven by contrasting the degree to which the claimant either misrepresented their condition, the absence of mitigating factors in the claimant’s favor or the extent they have gone to perpetuate the misrepresentation, as just a few examples.

WCB G29468122 “C-3. Can’t Catch Me”

This is an established back claim from 1/27/2021. He did disclose a prior back issue on his C-3 but failed to disclose the details of treatment to his doctors and our IME. Over the course of numerous hearings, the claimant was evasive about prior back treatment at one point saying he thought it was 20-22 years ago. He denied any specific accident or specific treatment and even claimed evidence of a prior MVA was due to due identify theft. We were able to produce evidence of frequent treatment including MRIs in 2014, 2015, 2016, 2017 and 2020.

The judge agreed with us that the prior medical records demonstrated greater treatment that the claimant had disclosed in his testimony and found his answers sufficient to implement a full mandatory and discretionary penalty.

WCB G2643134 “PPP – not me!”

An established low-back, left-wrist, left-knee and adjustment-disorder claim from a 2/16/2021 injury. We initially raised fraud and sought suspension on 1/4/2022. Suspension was granted and appealed but the claimant failed to appear at the February 2022 hearing. It was not until the board panel upheld suspension in a 5/31/2022 decision that the claimant finally agreed to testify, which did not take place until September 2022. After 114-a was raised, the claimant returned to work for seven days later, on 1/10/2022.

This case centers on the carrier producing evidence that the claimant filed for, and received, a PPP loan for his own business. Social media was also used to demonstrate the claimant was advertising a landscaping business. At the same time, the claimant reported to his own doctors and the IME that he could not even perform his activities of daily living and was not working.

The PPP loan documentation, showing the claimant engaged in his own landscaping business, coupled with video surveillance of the same, as well as video showing the claimant easily engaging in his daily activities, was more than enough to secure a mandatory and full discretionary ban from the Judge.

This case deserves a special mention based on the fact that our attorney was able to secure an early suspension by describing the nature of the proofs to the judge and offering to send the documents to the judge for an in-camera review. The judge declined but found the offer and description sufficient for an early suspension.

It is important to note that the Board Panel Decision of 05/31/2022 did not address how they would have ruled had the Judge elected for in-camera review of the documentation, but they seemed to consider the offer sufficient coupled with the description. 

WCB G2602984 “Real Estate Exaggerate”

This is an established 2019 injury for the low back. The carrier raised attachment when the claimant was at a period of 50-percent disability. He produced a letter from his employer that he is still considered an employee of the company, but on leave of absence, so development of the record was denied.

Both social media and video surveillance was produced showing the claimant was actively engaged in alternative employment as a realtor. The investigators met him under the guise of potential home buyers and produced over two hours of video of the process, often talking about the nature of his business. Other video was produced demonstrating the claimant was far more capable in his activities of daily living than the medical reports indicated.

In addition to the fact the claimant was working as a realtor, a review of the medical record demonstrated the claimant was not truthful with the nature of his employment for the employer of record, leading his doctors to believe it was much more heavy-labor focused than it really was.

The claimant was evasive and tried to downplay his realtor interactions. The judge considered this when he handed down a mandatory and permanent ban. The case is under appeal, but we do not anticipate a change of opinion.

WCB 50610468 “Confession”

This is an established 2006 (pre-capped) claim for the left shoulder and neck. The claimant, at a hearing on 12/8/2021, testified that he had been working for at least a few months and failed to disclose to the carrier as he didn’t consider his compensation checks to be based on his inability to work, but rather a percentage of his disability. He confirmed his earnings were in excess of his 2006 AWW but appeared to feel it was appropriate to keep cashing them as his workers’ compensation checks were too small to live on.

He was also looking for work specifically due to an unrelated incarceration that required him to work as part of his parole release.

We argued and the judge agreed that the December 2021 disclosure does not negate that awards were placed on the record at hearings earlier in 2021. The claimant has appealed the discretionary penalty provision.

Yet again, these findings were made possible through coordinated efforts with our clients, investigators and the collaborative, team-oriented approach of our attorneys.

As we stated before, while surveillance is key, communication among all parties is crucial to obtaining a strong mandatory and discretionary finding. We would recommend to any of our clients who feel the claim is not progressing, or have any indication of suspicious activity, to coordinate with our team.

We continue to congratulate all of our clients and our attorneys to their hard work and dedication and look forward to future successes and future publications.

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If you missed our Webinar Series on 114-a and how to maximize your claims, the information is included below.