Under California law, workers' compensation is a no-fault system because employees do not have to prove that an injury occurred due to another person's fault for them to get compensation. As long as an employee suffers injuries while on-the-job, he/she is entitled to workers' compensation. The injured employee may be able to recover the medical expenses incurred in seeking treatment for their injuries. A worker may also be able to recover lost wages resulting from the injury.
Workers' compensation fraud is a serious offense in California; everyone suffers because of workers' compensation fraud. The fraud leads to the waste of tax dollars, an increase in the price of consumer goods, and the failure of legitimate businesses. The fraud may also make employers and legitimately injured workers lose money. California law is harsh on people who commit workers' compensation fraud. If you or a loved one is facing charges for the fraud, Los Angeles Criminal Lawyer can help you come up with a legal defense.
Executing Workers' Compensation Fraud
There are several ways of committing workers' compensation fraud. The fraud may involve doctors and lawyers taking part in claim mills. It is common for people to file false work injury claims. Workers may visit medical clinics or other legal referral centers known as claim mills. The centers then refer the workers to doctors and lawyers who are also part of the fraudulent schemes.
A worker may also file a legitimate claim only for the medical or other health practitioners to fraudulently maximize the value of the claim. The medics may inflate the medical reports and the billings to increase the number of billings. Medical practitioners may also commit fraud by offering unnecessary treatment or over billing the patients.
Employers may commit fraud by misstating the number of their workers or misstating the nature of work employees engage in intending to commit premium fraud. For instance, instead of the employer revealing that an employee is a roofer, the employer may lie that the person is an office worker. It is also common for employers to operate under an underground economy, which does not involve carrying workers' compensation insurance. Under California law, all employers should carry workers' compensation insurance for their employees. A proactive compliance program often requires employers to provide proof of workers' insurance.
Employers and employees of an insurance carrier may come together to commit fraud by making false statements regarding workers' entitlement to compensation and benefits. These statements aim to deter or to discourage injured workers from pursuing legitimate compensation claims.
A worker may also commit fraud by faking an injury or lying about the extent of the injury suffered while at work. A worker may also be guilty of fraud for failing to admit previous filing claims and failing to disclose previous non-work related injuries. A worker may also claim that a non-work injury is work-related or engage in illegal means while seeking compensation.
California Statutes on Workers Compensation Fraud
Several different California statutes address workers' compensation fraud. Some of the common statutes include:
Insurance Code 1871.4
The main workers' compensation fraud statute in California is the Insurance Code 1871.4. You may face fraud charges under this statute if you make, or you cause the making of false or fraudulent material statement or representation intending to deny or obtain workers' compensation benefits. It is also illegal to present or cause the presentation of an intentional fraudulent or false oral or written material statement supporting or opposing a claim for workers' compensation benefits.
You may be guilty of committing fraud if you intentionally aid, abet, or conspire with a person to commit workers' compensation fraud. It is also illegal to make or cause the making of a knowingly fraudulent or false statement regarding entitlement to benefits to discourage an injured worker from filing a legitimate claim for benefits.
This statute defines workers' compensation benefits as any form of private insurance policy that employers should pay for in California. If a worker suffers injuries while on the job, the private insurance company compensates the worker for the medical costs and temporary disability, temporary disability will include payments for lost wages for the time the worker stays away from work while recovering from the injuries.
The worker may suffer severe injuries making him/her unable to work again after the accident. In this case, the insurance company compensates the worker for permanent disability. It is common for workers to succumb to work-related injuries or illnesses. In this case, the insurance company makes payments to the worker's spouse, children, or other dependents.
California law limits workers concerning seeking workers' compensation. For instance, an employee cannot sue the employer in a civil court in California for injuries suffered while on the job.
The statute outlines the various ways of making a false statement or representation. The claimant may make an oral or a written false statement or representation. Other ways of making a false statement include issuing a false notice, proof of injury, a bill of services, false test results or x-ray results, and a false proof of medical or legal expenses. It is also possible to make a false statement regarding the payment of services or any other evidence of loss, expense, or injury.
The law deems any representation or statement as to material as long it is reasonably relevant to the investigation of the compensation claim. As long as a representation or a statement can bear importantly or directly on the evaluation or investigation of the claim, it is material.
Fraudulent or False Statements
In the context of workers' compensation fraud, California law defines a fraudulent or a false statement as any stamen that untrue. If a statement conceals a material fact intending to induce a person to act to his/her detriment, it is a fraudulent statement.
Applicants of compensation may make a fraudulent statement by faking injuries or lying about the level and extent of injuries. Failing to disclose previous injuries or lying that a non-work injury is a work-related injury may also constitute false statements. Employees may face fraud charges for collecting benefits for the same injury from more than one employer. It is also an offense for a worker to engage in double-dipping. Double-dipping refers to working illegally while at the same time, receiving workers' compensation benefits.
California PC 550
The California PC 550 outlines several types of workers compensation frauds that tend to overlap with health care fraud in California. Under California statutes PC 550, it is an offense to intentionally make or cause the making of a fraudulent or false claim to aid the payment of health care benefits covered by workers' compensation insurance in California.
Intentionally submitting a claim for a health care benefit provided under workers' compensation insurance not used by the claimant is a fraud. Intentionally presenting multiple claims seeking payment for the same workers' compensation health benefit is a form of fraud.
Commission of workers' compensation fraud under PC 550 is not limited to applicants or employees. It is common for doctors and other medical practitioners to perform this form of fraud. Medical practitioners who offer treatment covered by workers' compensation insurance may commit this form of fraud.
California Statute PC 549
Under California law PC 549, an employee or business owner may face workers' compensation fraud charges for accepting, soliciting, or referring any business to or from any entity or person. Charges may apply as long as the defendant was aware that the person or the entity had the intent of committing workers' compensation fraud.
It is common for doctors, chiropractors, and other medical practitioners to face workers' compensation fraud under PC 549. These medical professionals may be part of commercial bribery or kickbacks aimed at defrauding the workers' compensation system.
Consequences for Committing Workers' Compensation Fraud in California
The penalties you face for committing workers compensation fraud in California will depend on the statute you violate:
Fraud under Insurance Code 1871.4
If you commit workers' compensation fraud by violating the California insurance Code 1871.4, the offense is a wobbler. The prosecutor may choose to charge the offense as a misdemeanor or felony depending on the circumstances of the case and your criminal history.
If you get misdemeanor charges for committing workers' compensation fraud, the penalties may include serving misdemeanor probation. The court may impose jail time of up to one year in a county jail in California. The court may also impose a hefty penalty of $150,000 or double the value of the fraud, whichever is greater.
The court may require you to pay restitution to the victims. Paying restitution to the victims of fraud entails reimbursing the victims for the losses the victims may have incurred due to your fraudulent acts.
If the prosecutor chooses to charge the offense as a felony, the penalties include serving a formal /felony probation. While on felony probation, you may be subject to certain conditions of probation, including meeting with the probation officer or visiting the probation officer regularly.
In line with California's realignment program, you may be subject to two, three, or five years in a county jail in California. The court may impose a fine of $150,000 or double the amount of fraud whichever is greater. Just like in the case of a misdemeanor conviction, you may have to pay restitution to the victim.
Fraud under California PC 550
If you commit workers compensation fraud under California statutes PC 550, the offense is also a wobbler. For a misdemeanor conviction under PC 550, the consequences include serving misdemeanor probation or jail time of up to one year in a county jail in California. You may also have to pay a hefty fine not exceeding $10,000.
For a felony conviction, the penalties include serving felony probation. The court may subject you to the imprisonment of two, three, or five years in a county jail in California under the California realignment program. You may also be subject to a fine of up to $50,000 or double the amount of fraud whichever is higher.
If the total amount or value of fraud is $950 or less, the workers' compensation fraud is always a misdemeanor, in considering the value of the fraud, the court considers cumulative claims over 12 consecutive months. For this type of offense, the penalties include jail time of up to 6 months in a county jail in California. The court may also subject you to a fine not exceeding $1,000.
Fraud under California PC 549
If you commit workers' compensation fraud under PC 549 by accepting, referring, or soliciting business knowing that a person or entity intends to commit fraud, the offense is a wobbler for a first offense. For a second or subsequent workers' compensation fraud under PC 549, you will face felony charges.
For a misdemeanor offense, the penalties include jail time of up to one year in a county jail in California. The court may impose a hefty fine of up to $50,000or double the amount of fraud whichever is greater.
For a felony conviction, the consequences include serving jail time of 16 months, two years, or three years. You may also have to pay a fine not exceeding $50,000 or double the amount of fraud whichever is greater.
If a health professional such as a doctor, nurse, or pharmacist engages in workers' compensation fraud, he/she may be subject to professional discipline. Professional discipline may apply for any criminal conviction that revolves around the duties, functions, or qualifications of a health professional. A health practitioner may face professional discipline for billing for medical services not rendered.
If a nurse engages in workers' compensation fraud, he/she may be subject to license revocation or nurse discipline. If a pharmacist engages in fraud, the conviction may hurt his/her professional license.
In some instances, committing a workers compensation fraud may subject you to civil penalties. For instance, if you willfully and intentionally misrepresent facts to obtain workers' compensation insurance at a lower cost than the proper rate, you may face civil penalties. It is common for employers to commit this form of fraud.
Civil penalties may also apply due to presentation or causing the presentation of fraudulent or false statements supporting or opposing workers' compensation benefits. This fraud aims to fraudulently obtain or deny workers' compensation benefits.
You may face civil penalties if you intentionally receive, offer, solicit, pay, or accept unlawful rebate, commission, refund, or compensation for referring or soliciting clients for services provided under workers' compensation insurance.
If you participate or intentionally take part in a service that refers patients to seek medical or medical-legal services provided under workers' compensation in exchange for a profit, you may face civil fraud charges.
Conspiring or intentionally assisting another person to carry out the outlined offenses may subject you to civil penalties.
The applicable civil penalties may include a penalty of a minimum of $4,000 and a maximum of $10,000 for every unlawful claim for workers' compensation.
The court may also subject you to an assessment of up to three times the amount of medical-legal or medical treatment expenses covered by the workers' compensation insurer because of the fraud.
If you commit workers' compensation fraud and you have a previous conviction for fraud under Insurance Code 1871.4 or Penal Code 549, you may be subject to a civil penalty of $4,000. This penalty is applicable for each service or item concerning the fraud.
Fighting Workers Compensation Fraud Charges
Workers' compensation fraud is the fastest growing form of insurance fraud in the United States. For this reason, insurance companies and law enforcement agencies have come together to eradicate this form of fraud. If you are facing fraud charges in California, you will need an experienced criminal lawyer to help you come up with a proper defense. Some of the common defense strategies for the charges include:
Lack of Fraudulent Intent and Knowledge
Just like in the case of other fraud crimes, you cannot face charges for workers' compensation fraud in California if you did not have fraudulent intent. If you prove that you did not know that a specific statement or behavior was fraudulent, you cannot face fraud charges.
The insurance investigator may consider an innocent mistake on your side as fraud and report you to the authorities. However, the prosecutor has a legal burden of proving beyond a reasonable doubt that you are guilty of the said offense.
With the help of an experienced criminal attorney, you can challenge the evidence presented by the prosecutor against you.
Lack of Enough Evidence
Most workers' compensation fraud cases revolve around complicated evidence and facts. The evidence in these cases is often intricate, intertwining, and in some cases, conflicting. The prosecutor may take advantage of the complexity of this evidence to accuse you falsely. Your attorney can defend you by verifying the evidence presented by the prosecutor against you to prove whether the evidence is true. If the prosecutor does not have ample evidence against you, the court may drop your charges.
Contact a Los Angeles Criminal Attorney Near Me
Given the complexity and seriousness of workers' compensation fraud charges under California law, you cannot fight the charges on your own. If you or a loved one is facing charges for the fraud, you need an experienced criminal lawyer by your side. Contact Los Angeles Criminal Lawyer at 310-502-1314 and speak to one of our experienced lawyers.