News Release

Caught on video: Oyster harvester accused of faking injury to collect $70K in workers’ comp benefits

April 23, 2019

OLYMPIA — A Shelton man faces a felony theft charge accusing him of commercially harvesting and delivering shellfish while claiming he was disabled from a back injury and couldn’t work.

Jose Cruz Contreras Alvarez, 39, is scheduled for arraignment on Tuesday, April 23, on one count of first-degree theft in Thurston County Superior Court in Olympia.

He’s charged with stealing more than $70,000 in workers’ compensation benefits from late 2016 through July 2017. The amount includes medical and vocational benefits and more than $32,000 in payments to replace his wages.

The Washington Attorney General is prosecuting the case based on a yearlong investigation by the Washington State Department of Labor & Industries (L&I).

Anonymous tip spurs investigation

Contreras Alvarez had been receiving workers’ compensation benefits since at least early 2013 for a back injury he suffered while working as a shellfish harvester.

In 2017, the department launched its investigation after an anonymous tip to L&I’s fraud hotline claimed he was working for his wife’s company. Investigators confirmed it, finding that Contreras Alvarez was performing commercial shellfish work, according to charging papers.

Seeding oyster larvae, bagging oysters

Witnesses said Contreras Alvarez started working for his wife’s oyster operation in 2016, doing everything from seeding the waterfront with oyster larvae to harvesting and bagging the shellfish, charging papers said.

The same year, Contreras Alvarez offered to sell shellfish to a large wholesaler, an employee at the wholesale company told the case investigator.

Undercover video

The investigator videotape-recorded Contreras Alvarez loading bags of oysters into trucks owned by that wholesaler seven times in the spring and summer of 2017.

Yet during that same period, from late 2016 through July 2017, Contreras Alvarez repeatedly declared on official forms that he wasn’t working and was unable to work due to his on-the-job injury. At one point, he told his physical therapist that apart from walks and going to the pool, he didn’t do anything at home except rest to help his pain.

Denies working

During an interview with the case investigator in August 2017, Contreras Alvarez denied performing work for his wife’s shellfish company, saying he was too injured to work.

If convicted of first-degree theft, Contreras Alvarez could face up to 10 years in prison and a $20,000 fine, and be required to pay restitution and other costs. 

L&I fraud hotline

L&I administers the state workers’ compensation insurance system, which helps injured workers heal and return to work. If you suspect someone is cheating the workers’ comp system, contact L&I's Fraud division or call 1-888-811-5974.

For media information:

Debby Abe, L&I Public Affairs, 360-902-6043.

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