Small Scale Crime Has Implications for North Carolina Workers’ Compensation Fraud Prevention

October 5, 2011, by Michael A. DeMayo

What can be done to reduce or even eliminate North Carolina workers’ compensation fraud?

To solve this dilemma, we need to look beyond our state’s borders and pick apart relevant news stories, data, analyses, and arguments compiled by experts. It’s all well and good to theorize about different methods to deal with, manage, or punish North Carolina workers’ compensation fraud. It’s another story altogether to operate in the “real world” and get good results.

Even “small scale” cases of fraud can yield surprisingly relevant and far-reaching lessons, if we understand how to appreciate these stories in context. Consider a small bore story about workers’ comp fraud in Des Moines, Iowa. As the AP reported on September 23, the president of DES Staffing, Dinesh Sethi, plead guilty last week to wire fraud: “He acknowledged that he participated in a scheme to defraud Travelers Insurance and Liberty Mutual between 2006 and 2009 by giving the insurers’ false information to calculate the firm’s premiums…he and his Director of Finance shifted payroll from high-premium job classification codes to lower-premium codes such as clerical workers.”

Per the plea arrangement, Sethi’s five other charges have been dropped, and prosecutors will not go after either his company or his family. He will face sentencing at the end of December.

So is it really possible for us to extrapolate from this small case and learn more widely applicable lessons?

Maybe so.

Here are three lessons:

Lesson number one: Outsized punishments can affect criminals who commit even small, technical crimes.

In the grand scheme of things, Sethi’s wrongdoings (or alleged wrongdoings) are relatively tame, if you measure them against other criminal acts, like felony murder, vehicular manslaughter while DUI, and massive multimillion-dollar Medicare schemes. But he could still face jail time and other career-ending punishments for what he did.

Lesson Number Two: Schemes can go on for a while before the authorities step in, but con artists are never safe.

According to the AP article, Dinesh and his finance director perpetrated fraud for approximately four years before getting busted. The long arm of the law, however, finally caught up.

Lesson Number Three: It’s almost always worth the time and effort to ensure you are operating fairly, ethically, and legally.

Many people who commit fraud do so inadvertently, or at least without knowledge of the consequences. A sick mother on workers’ comp leave, for instance, may take a second job to try to earn a little extra money for her family, oblivious to the fact that taking the second job violates her workers’ comp arrangement.

To protect your rights and ensure that you stay within the bounds of the law, always consult with an experienced North Carolina workers’ compensation law firm.

More web resources:

Des Moines exec pleads guilty to insurance fraud

Ankeny man pleads guilty to insurance fraud

 
 

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