Fraud Doesn't Pay in New York – February 2024 Update

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AN OVERVIEW OF RECENT DECISIONS DEMONSTRATING THE BOARD’S CONTINUING ATTITUDE TOWARD 114-A

As a part of our Quarterly Practice Group Update, we are pleased to produce our next installment of examples of our success in the area of fraud litigation.

This report was originally conceptualized nearly three years ago as a one-time publication in May 2021, however due to the consistent success of our dedicated attorneys we are very pleased to be able to continue to relay our successes.

  • WCL 114-a provides the Workers’ Compensation Board with the authority to disqualify a claimant from receipt of lost time benefits, “[i]f for the purpose of obtaining compensation pursuant to section fifteen 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.
  • It is important to note that medical benefits remain open but should be questioned in the litigation process.

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 period 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.

WCB G3402654 “Lightning Strikes Twice”

This was a claim originally accepted without prejudice for the right knee. The carrier protectively obtained an ISO search showing a prior bilateral knee claim and noticed in the treatment records that the claimant disclosed a prior left knee condition, but nowhere in the narratives included any discussion of the right knee. Upon closer inspection, nowhere in the narratives indicated the present condition was work related.

After a discussion with the carrier, we recommended they modify the acceptance to a denial. We obtained a release and an OC110a and learned the prior bilateral knee claim that not only contained a surgical history, but also resulted in a 114-a lifetime ban for working while being totally disabled.

Through development of the record, we deposed the treating doctor who testified he was originally not told the present problem was work-related, had no idea the claimant had a prior right knee condition, and no idea he had prior surgery. He confirmed the claimant never informed him of his (now a year later) and did not know until his deposition was scheduled.

The law judge in a Bench Decision admitted he was tempted to finding fraud but instead just disallowed the claim entirely, admonishing the claimant that he “hid a very relevant fact from his doctor for a very long time.” The claimant has appealed but we anticipate no variation from the Board Panel.

WCB 69516446 “I volunteer, so I’m in the clear?”

This is an established 1995 back injury claim, apportioned with a 2005 back injury claim and an overall permanent, total, disability.

Surveillance was obtained which showed the claimant had an extremely active lifestyle in her neighborhood, but claimant also was apparently working for a well-known auto-motive brand. In addition to organizing and running promotional events, the investigators were able obtain footage of the claimant participating as a driver in off-road race events.

Her sole defense was she was a volunteer and that the carrier failed to prove she received wages for her participation. The judge correctly found 114-a noting that receipt of income is not required when evidence demonstrates a clear working capacity. He implemented a lifetime ban in both files.

WCB G2403859 “Numbers Don’t Lie”

This is a 6-year-old claim for the back, neck, bilateral shoulders and bilateral hands. At a hearing in September 2013, the claimant testified she returned to work on July 11, 2023, and had not been cashing any checks from the carrier since her return. We submitted proof that this was incorrect and she continued to cash the checks.

The judge ordered the carrier to produce the cancelled checks and the claimant to produce payroll and held any overpayment in abeyance.

At the following hearing in January 2024, the claimant changed her testimony that she started working as an unpaid volunteer from July 2013 to September 2013, and then worked part-time for minimum wage. She produced a typed, job-offer letter that was clearly modified in handwriting to change the start date from “07” to “09.” The claimant, however, in her attempt to cover up the true start date, forgot about the paid-to-date category of her paystub showing earnings in the thousands.

Had she been honest from the start, a possible overpayment or mandatory penalty would have been likely but due the clear, blatant attempt to hide the truth, the judge found a mandatory and permanent, lifetime ban. The claimant has appealed but again, we do not expect a different result.

WCB G3152792 “Smile for the Camera”

This one is strictly speaking of another case that is not 114-a, but a complete disallowance. This was an asserted claim for the left and right knees, left leg, left arm, shoulder, chest, neck, left side ribs, upper back, lower back and right wrist. There was a significant number of pre-existing co-morbidities that overlapped the asserted injury sites.

The claimant asserted that she was getting into a motorized scooter at work, and it fell onto her knocking her to the ground. She confirmed this in writing in her C-3 and a written statement and it is repeated in nearly every medical report.

We were able to provide video of the incident in our defensive filing that shows nothing of the sort took place. Specifically, no fall occurred in the video. This video was sent to the treating doctors before they testified.

The claimant changed her story after the video was admitted to the record and testified that she lost balance as the scooter was parked oddly and the strain from holding on and not falling, caused her injuries. We deposed her doctors who confirmed she specifically reported the scooter fell on her and the injuries she asserted could not have happened by strain.

In a Reserved Decision, the law judge disallowed the claim entirely as the claimant provided an inaccurate history in her C3 and to her medical providers. No appeal was filed.

WCB G2449988 “Bridezilla”

This is an established 2019 claim for the back, left shoulder, left hip and left knee resulting from a fall on ice.

At a hearing in September 2023, the claimant testified she owns her own business, which is a non-profit and she receives no personal income. She does not “work” for the business, but simply owns it. While testifying on the nature of her work, it came out that she had returned to work for a new employer, seven months prior. She thought she told her attorney and kept all the money she received from her compensation carrier in a separate account but had since spent it all due to a personal emergency, which turned out to be her wedding fund.

Her defenses to 114-a was she did not realize she had to disclose work and did not realize she was not entitled to keep the checks.

A mandatory ban was implemented, as well as an equivocal discretionary ban.

WCB G3223798 “Got g-RE-edy”

This claim arises from a 2021 injury to the back. In 2013, in a bid for concurrent employment and reduced earnings, the claimant filed proof he was delivering for a well-known food delivery vendor. A review of the records provided by the claimant show that he was working this second job for his whole claim, including periods where he was totally disabled. Further, a re-examination of the medical exams show the claimant consistently denied working in any capacity to his doctors and to the carrier’s IME.

Initially, the judge found no 114-a violation. The board, however, remanded the matter for development of the record on whether his doctors were aware of the ongoing work activity. After full development of the record, the judge handed down a mandatory penalty greater than a year.

As always, these findings were made possible through coordinated efforts with our clients and with investigators and the collaborative, team-oriented approach of our attorneys.

As we stated before, while surveillance is key, communication among all parties is crucial to obtaining a strong mandatory and discretionary finding. 

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