Companies Scammed in 2006 North Carolina Workers' Compensation Fraud Case to Collect $6.5 Million

August 29, 2009, by Michael A. DeMayo

In October, 2006, employers who had bought into a self-insured North Carolina workers’ compensation group fund got some terrible news. The Phoenix Fund’s reinsurance broker, a man named Thomas Raitz, had been engaging in complicated illegal shenanigans to steal from the fund via a money laundering and mail-fraud operation. Investigators from North Carolina’s Department of Insurance concluded that Raitz’s scheme impacted more than $20 million worth of the fund’s money.

Although Raitz was convicted in 2007 after pleading guilty and was subsequently sentenced to nearly 6 years in jail, members of the Phoenix Fund have yet to collect money and damages. Finally, in 2008, Raitz was ordered by the court to pay $19 million to reimburse the Phoenix Fund. To date, Raitz has paid out $18 million, of which $11.5 million has gone to meet the obligations of the fund itself and has not gone to remunerate individual employers. Only $6.5 million collected will be distributed among the injured parties. That said, the North Carolina Insurance Commissioner, Wayne Goodwin, released a statement that sounded a note of optimism for these employers, assuring the victims that they would “get back every available penny” owed to them.

Triangle Business Journal, North Caroilna employers to get $6.5M from Phoenix Fund, August 10, 2009

Workforce Management, Workers’ Compensation Fund Members Hit by Fraud Get Distributions, August 14, 2009

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North Carolina Insurance Commission

North Carolina’s Department of Insurance