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Fraud Still Doesn’t Pay in New York—An Update


Fraud Still Doesn’t Pay in New York—An Update

Key Takeaways

  • New York Workers’ Compensation Law 114-A provides the Workers’ Compensation Board with the authority to disqualify a claimant from receiving lost time benefits if a claimant knowingly makes a false statement or representation as to a material fact for the purpose of influencing any determination regarding such payment

  • Surveillance is a key to obtaining strong mandatory and discretionary findings


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

Although individuals continue attempting to fraudulently collect lost time benefits, as the matters described in this update will show, perseverance and surveillance activities regularly pay off in the area of fraud litigation. As a supplement to our June 17, 2021 practice group update, we are pleased to provide additional, more recent examples of our continued success in these matters.

WCL 114-a provides the Workers’ Compensation Board with the authority to disqualify a claimant from receiving 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.

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 penalty 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.

“It Wasn’t Me” WCB G2880424

The claimant was putting herself out as totally disabled from the date of her accident onward. Through social media investigations, we discovered that the claimant was operating a business out of her home. While the business was up and operating, the claimant testified that she was not doing any type of work either on or off the books, for pay or not for pay, for friends or family, doing any volunteer work, or owning a business.

Then, in advance of the next hearing, we provided the claimant, claimant’s counsel, and the judge with our 61-page investigative report. The claimant essentially testified that the posts were all of her sister and her sister’s business and that she did not provide any aid to that business. The judge found that the surveillance only showed that the claimant was possibly interested in starting a business. However, he was so off-put by the claimant’s rebuttal testimony asserting it was not her but her sister that he found her to be entirely incredible and used that as the basis to implement a 114-a ban.

“The Gardner” WCB G1743308

The claimant was treated by her chiropractor, who found she is 100% impaired and cannot return to any level of work due to her condition. It was noted specifically that she had problems getting on the exam table. On the same day, surveillance was obtained showing the claimant bending at the waist to weed her lawn, and using a riding mower and a push mower to mow her lawn.

The judge found no fraud or attempt to misrepresent and awarded the claimant a reduced rate of 25% disability. We appealed, and the Board modified the judge’s decision to not only a finding of 114-a, but a full mandatory and discretionary ban.

“Checks Mix-Up” WCB G2286325

This is an established case in which the claimant was awarded indemnity benefits at a hearing on August 20, 2019, with a CCP in place. Her medical reports consistently listed her as out of work. The carrier obtained an IME on January 21, 2021, wherein the claimant advised the doctor that she was in fact working. We filed for a hearing.

At the hearing, the claimant admitted she returned to work in October 2020 and continued to cash checks from the carrier for the period in which she was employed. The claimant testified she believed she was entitled as the checks were compensation for her damaged ankle and did not consider them as payments for lost income. The judge and, subsequently, the Board found her excuse incredible and the full mandatory and lifetime bans were upheld.

The Board went so far as to pull the minutes from the August 2019 hearing, wherein the claimant was expressly made aware by the judge of her obligation to notify all parties should she ever return to work.

“Checks Mix-Up, Part II” WCB G2128938

The claimant in this matter was found to have returned to work, yet still cashed her indemnity checks from August 2019 to February 2020. She was given multiple opportunities to present herself for testimony and, despite being represented by counsel, she failed to appear at a single hearing.  After a final opportunity specifically noted in the March 5, 2021, Notice of Decision that a negative inference would be drawn should she again fail to appear, she did not present herself at the next hearing.

At the hearing which followed, the judge implemented a full mandatory and lifetime ban and in addition ordered a full reimbursement to the carrier.  The claimant appealed, but the decision was unanimously upheld by the Board panel.

“Out of Work Taxi Driver” WCB G2768867

The claimant was listed as 100% disabled by her own provider. The doctor specifically noted in her narratives that the claimant was unable to return to any line of gainful employment. Surveillance indicated the claimant was working during this time at a well-known ride-share service provider. We filed for 114-a and demanded the records or asked for a negative inference. She produced evidence that during the three-and-a-half months she was “totally” disabled, she performed 479 individual rides.

Her defense was that her doctor and the carrier knew about her activities. The carrier provided an affidavit denying knowledge and her doctor testified clearly that she had no idea. She watched the video and, in addition to confirming she never knew the claimant was driving or she would not have said 100%, she testified that the claimant getting in and out of a car and opening doors was greater than the activity level she believed her capable of in her examinations.

The judge implemented a mandatory ban and we have appealed for a full discretionary ban, which is pending.

“Car Crash Amnesia” WCB G2473542

The claimant in this matter filed a claim for the neck, back and right shoulder, denying any prior injury to those sites. His doctors indicated only a history of diabetes. The claimant denied any prior injury to these sites at a hearing on June 28, 2019. He denied any prior history to the carrier’s IME doctor, again only noting a history of diabetes.

At a later hearing on January 26, 2021, the claimant testified he was in motor vehicle accidents in 2011 and 2015. He admitted that the 2011 incident resulted in treatment to his low back which resolved. We produced records showing the claimant had positive MRI findings to his back and his neck as a result of these injuries, including disc herniation with positive impingement signs. He testified he forgot about these incidents and his failure to disclose was not intentional.

The judge found a mandatory penalty based on the claimant’s repeated denial of any prior condition. We appealed, arguing not only that the claimant denied these injuries, but his degree of disability has been greater based on the belief the MRI findings were related to the asserted claim.

The Board panel agreed with our position that a full lifetime ban is warranted due to “significant prior injuries” and the claimant’s clearly false testimony.

“Back to Barber School” WCB G2782558

This is an established claim for the head and right arm, and an asserted claim for post-concussion syndrome, headaches, cognitive impairment, and consequential anxiety from September 2020. He was released back to work in January 2021, but was immediately removed from work due to a positive COVID-19 test. He returned for one day in February 2021, but had an asserted flare-up of his anxiety and cognitive issues and was immediately removed from work again at 100% disability, where he remained. He was, essentially, homebound.

Surveillance was obtained in May and June 2021 of the claimant attending beauty school, attending class, and working as a barber. The investigator was even able to schedule a haircut.

At the eventual hearing that took place in October 2021, the claimant—after great effort—disclosed that he was doing a paid internship at a barber college Mondays through Fridays, but further misrepresented himself that it had just begun in September 2021.

Based on the surveillance video’s stark contrast to the medical narratives, coupled with the claimant’s false testimony even at the fraud hearing, the judge implemented a mandatory and full discretionary ban, as well as denying the claimant’s request to develop the record on claim expansion.

These findings were made possible through coordinated efforts with our clients and with investigators.

We were initially worried in this new world of virtual hearings that 114-a findings would be harder to come by as the element of personal observation on the part of the judge has been eliminated. As you can see by these results, as well as the results published in our June 2021 Update, thankfully, those fears were unfounded.

Surveillance is a key to obtaining strong mandatory and discretionary findings. We would recommend to any of our clients who feel a 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 we look forward to future successes.

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