Sunday, December 16, 2012

Workers Comp fraud - finally real punishment for a real crime


By now many people have heard of the sentence imposed on Modupe Adunni Martin.  On Thursday, she was ordered to serve nine months in San Mateo County Jail for workers' compensation fraud. 
The 29-year-old Hayward resident was convicted of falsely claiming that she suffered an ankle injury while employed by the Sequoia Union High School District in 2009 that rendered her unable to walk.   

Martin was exposed when photographic evidence was obtained showing her scampering through a public park while wearing high-heeled shoes.  After doctors grew suspicious that Martin was exaggerating her injury, she was placed under video surveillance.  Besides the frolic in the park, Martin was filmed using crutches to walk to her medical appointments, but walking without crutches afterwards.  

At her sentencing hearing, in addition to her confinement, Superior Court Judge Craig Parsons ordered Martin to serve three years of probation after her release from custody as well as to repay over $79,000 in fraudulently-obtained benefits.

What surprised most people about the Martin case was that she was punished at all.  The state of California’s Department of Insurance notes on its website that no matter how diligent the state may be in their response to these cases, only a small portion of actual fraud is prosecuted as many fraudulent activities are not identified and, consequently, not investigated.

Unfortunately, the focus of the Martin case has been on the salacious nature of the material used to identify the workers’ compensation fraud.  (I have omitted the “juicy” details; you’ll have to read them elsewhere.)  I would like to see more observers broadcast the serious nature of the crime itself and have them advertise the serious jail sentence that was imposed as a cautionary tale to those who might contemplate similar behavior.

For too long employees have viewed workers’ compensation payments as an opportunity for a paid vacation at the boss’ expense; a chance for some compensated rest and relaxation.  The fraud usually (hopefully) begins with a genuine injury, but morphs into a situation where the employee develops a sense of entitlement to the “free” money.  Until we attack the fraud for the crime that it is, this job-killing expense will continue to spiral out of control.

It’s not that we do not ever punish those caught committing workers compensation fraud, it’s just the punishment is not normally of the type or extent that would act as a deterrent. 

As an example, I reviewed the website established by California’s Department of Insurance.  Since 2005, the state has been required to list for public review a roster of those convicted of workers’ compensation fraud.  The most recent posting is from October 2012.  It lists a single case from Los Angeles County for the entire state.  The employee named was convicted of stealing $160,203 in benefits.  The required reparation for her actions - 50 hours of community service!  She was assessed no jail time for a six-figure theft.  There was not an order issued for repayment of the stolen funds nor was there a fine to be paid for the offense.

This meager punishment is even more troubling when a review of the Insurance Department’s website shows that during the fiscal year ending in 2011, the Fraud Division identified and reported 5,741 suspected fraud cases.  The potential loss amounted to $276,894,742.  Even if we weren’t in a fiscal climate where every penny counted, this sum would still have a serious negative impact on our economy.
If the sanctions for this offense continue to be so lenient, it will communicate to potential offenders that it is well worth the risk to steal with impunity.

Hopefully, the Martin case is the beginning of meting out discipline that recognizes workers’ compensation fraud as a real crime.

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