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Fraud Doesn’t Pay in New York – November 2023 Update


Fraud Doesn’t Pay in New York – November 2023 Update

November 29, 2023
Nathan J. Milner

An Overview of Recent Decisions Demonstrating the Board’s Continuing Attitude Toward 114-a

(Editor’s Note – As a part of our Quarterly Practice Group Update, we are pleased to produce our next installment of examples of our continued success in the area of fraud litigation. This publication began as a one-time update however, due to the continuing positive results achieved by our dedicated attorneys, we are very pleased to be able to continue to relay our successes.)

Key Takeaways:

  • WCL 114-a provides the Workers’ Compensation Board the authority to disqualify a claimant from receipt of lost time benefits “[i]f for the purpose of obtaining compensation pursuant to Section 15 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.

The board has consistently broken down the severity of the violation 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 G3360638  “A Little Birdie Told Me”

This is an established claim for the right knee and right ankle. The claimant raised the low back and neck at a hearing. During the subsequent IME, the claimant asserted on the intake questionnaire that he could not drive, is limited to 30 minutes of sitting and standing, and could not push/pull/lift any weight. He also asserted 10/10 pain and loss of sensation and strength in the right arm due to his neck pain.

The carrier was anonymously sent an article from a local newspaper showing the claimant profiled in a dozen color photographs playing Frisbee golf with several pictures taken mid-throw, balancing on one foot, leaning, extending his right arm and twisting his back and neck. Based on the article, our attorney did some further investigation and found that the claimant registered for a Frisbee golf tournament one week after the date of the article, and even came in first place.

The claimant testified he had a significant recovery between his last medical appointment and the date of the article.

His own doctor explained in testimony (after 114-a was raised and the article disclosed), that the claimant conceded he was able to play, but only with his unaffected left arm. His doctor testified that there was no such amazing recovery and testified in detail why the photographs were inconsistent with his prior exams.

The judge found a mandatory ban, a lifetime ban and disallowance of expansion of the claim on credibility grounds.

WCB G2602984  “Real Estate Exaggerate” – Board Panel Update

This is an established 2019 injury for the low back. The carrier raised attachment when the claimant was at a period of 50% disability. The claimant 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 showed 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 was appealed, but the board panel fully affirmed the decision.

WCB G1127104  “Never Too Late”

This is an established claim for the head, neck, back, PTSD and cognitive impairment from 2014 traveling with two other claims. Through exhaustive litigation concerning expansion, reduced earnings, medical impairment, and permanency, it was discovered that the claimant had worked in 2014 and 2015, after the injury of record, as an actor. This was not something he previously disclosed.

In testimony, he claimed that his medical providers erroneously recorded his work history in past medical narratives and they were aware of his return to work. He also downplayed the extent of his work.

We obtained his income reporting through various guilds and income taxes to prove the extent of the claimant’s ability to work during the time period in question. We were able to show that the claimant made false statements to no less than 12 different doctors during this period concerning not only his work status (some of whom opined Total Industrial Disability), but also the extent and existence of prior treatment to established sites or sites he was trying to include in the various claims.

The judge and, eventually, the board panel found that the numerous misrepresentations of work-status and which injuries were included in his claims were made with the purpose of increasing his loss of wage earning capacity. The mandatory period was found to be a period of 9 years, from the first proof of his work history to 2023, when he continued to testify falsely about his prior employment and disclosures. The extent of the misrepresentations, coupled with his evasiveness during testimony and frequent attempts to expand his claims, lead the board panel to agree with a full lifetime ban on awards.

WCB G3041053  “Swapsies”

This is an established left ankle claim. In February 2023, the claimant filled out an IME questionnaire denying any present employment and reported that he required a cane for ambulation and was only able to stand or walk for 10 minutes. The same was reported to his own doctors in March 2023.

Meanwhile, surveillance from January 2023 showed the claimant traveling on multiple days to a business. He was recorded operating their trucks to moving docks, as well as loading and unloading packages both manually and with a pallet-jack. No crutch or cane was seen in the video.

We raised 114-a and during testimony the claimant confirmed he couldn’t sit or stand more than 15 minutes or work more than 20, and confirmed he appeared at the IME with what he called a crutch. He testified he does not have regular employment and that he could not even put on his own shoes. He claimed that, on behalf of a sick friend, he took his place and worked for him, but is not actually an employee himself. Although he knew surveillance existed, he testified to working in a sedentary capacity only “mostly sitting.”

We asked for both the mandatory and discretionary penalties for failure to disclose, exaggeration of physical condition and the claimant’s continued false statements in testimony. The judge agreed.

WCB G3224274  “Always get a HIPAA”

This is an asserted claim for the low back from a specific event in mid-November 2022. The claimant stopped appearing for work and finally told a supervisor he could not physically do the job anymore in late December 2022. He did not disclose an injury occurred for several more months.

The carrier controverted the claim due to lack of notice until February 2023 and lack of medical until March 2023. The claimant asserted he was treated in December 2022, but failed to provide a HIPAA release until several hearings in. Thankfully, the judge held off in issuing a decision until the records were received, as we argued they were essential and delayed due to no fault of the carrier.

When we finally did receive the records, they confirmed the claimant was treated in December 2022 but also included records from November 2022, only a few days after the asserted injury. The doctor recorded the claimant complained of low back/hip pain for several weeks, which pre-dated the asserted injury. The claimant additionally was asked about the cause and stated several times that nothing happened and he didn’t know what caused his pain. He denied any workplace activity. The office notes included a phone call from the claimant asking for a letter in late December 2022 stating that it was a workers’ compensation injury.

Strictly speaking, this was not a 114-a claim, although we intended to raise it. The judge, after reviewing the medical records prior to the hearing, disallowed the claim under WCL 21, on the basis that the medical records contradicted both the time of the onset of the complaints and contradicted that any workplace injury took place.

She found the claimant not credible as a result and disallowed the claim entirely. He did not appeal.

WCB G2622301  “Hide and Seek”

A February 2020 injury to the neck and right knee was amended to include the back and bilateral shoulders. The claimant was open about a prior 2017 accident to her neck and back, but downplayed the extent of the treatment and symptoms she was having and failed to specify she had a PPD rating from a prior worker’s compensation claim. She denied outright on multiple occasions any prior injuries, symptoms, or treatment to the right knee or shoulders.

The records we found indicated the claimant had been in several motor vehicle accidents, many of which resulted in significant treatment for the cervical spine and shoulders all the way back to 2002. She had been treating right up until the 2020 date of loss, including radio frequency ablations in 2019. The records also showed treatment for her right knee starting in 2014 with a slip and fall, and running through 2019.

In addition, a background search showed the claimant took out a PPP loan for a catering business in her name while she was out of work and disabled. When confronted, she alleged she was the victim of identity fraud and was directed to submit proof of a complaint, police report and tax returns, but failed to do so.

We argued for both the mandatory and lifetime ban due to the significant history and failure to provide proof of fraud with the PPP loan. The law judge agreed and implemented a full ban.

As always, these findings were made possible through coordinated efforts with our clients and with 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 for their hard work and dedication, and look forward to future successes and future publications.

If you missed our Webinar Series on 114-a and how to maximize your claims, please find our recording here.

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