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July 7, 2005

L&I’s anti-fraud effort recovers $27 million in first three months of 2005

TUMWATER — The Department of Labor and Industries' fraud program recovered more than $27 million in the first three months of this year, according to a report sent to the state Legislature and the Office of Financial Management. The money recovered represents delinquent workers' compensation premiums and improper payments to health-care providers and workers.

In 2004, the Legislature gave L&I additional money and legal authority to pursue fraud and abuse in the workers’ compensation system. The Legislature also required L&I to file quarterly reports in fiscal year 2005, explaining how the agency was spending the money and how much money it recovered. The newest report, covering January, February and March of this year, highlights those efforts. Activities include:

• Working with the Office of Inspector General, an L&I investigation led to a guilty plea and three years in federal prison for a man who created a company for the sole purpose of filing false claims for workers’ compensation and employment security benefits. In addition to the prison sentence, the man has been ordered to repay L&I $127,444 in benefits, interest and penalties.
• Based on evidence collected in an L&I investigation, a massage therapist pleaded guilty to first-degree theft for falsifying doctors’ signatures authorizing treatment. He was sentenced to 30 days in jail and ordered to repay L&I $100,000.
• An L&I investigation was turned over to the Pierce County prosecutor for criminal charges against an interpreter who billed L&I for services he didn’t provide. He owes nearly $564,000 in payments, penalties and interest.
• L&I investigators worked with various police agencies to build a case against a woman who filed 16 false workers’ compensation claims under various names in five Washington counties.

L&I identified and collected more than $109,000 from a siding contractor that had previously gone unreported. In addition, the Department of Revenue has charged him with theft for filing false records to avoid paying $65,000 in sales taxes.

To report fraud, or for more information about how to combat fraud and abuse, call 1-888-811-5974 or go to www.Fraud.LNI.wa.gov.

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Media contact: Robert T. Nelson, L&I Public Affairs, at 360-902-6043 or nelq235@LNI.wa.gov or visit the L&I News and Media Center at www.LNI.wa.gov/News.