Archive

Archive for July, 2013

Northwood roofing business owners guilty of workers’ comp fraud

NORTHWOOD – The owners of Triple Star Roofing (Wood County) were found guilty of fraud July 15 for failing to report payroll to the Ohio Bureau of Workers’ Compensation (BWC) in an attempt to avoid paying workers’ comp insurance premiums. Frederick Diebert and Michelle Scaggs face possible prison terms of one to five years and fines of up to $10,000 when they are sentenced Sept. 13.

“For years, Mr. Diebert and Ms. Scaggs claimed their company only used subcontractors and reported they had no payroll, but that simply wasn’t the case,” said BWC Administrator/CEO Steve Buehrer. “Schemes like this to avoid paying premium undermine the purpose of workers’ comp insurance – to protect workers who are injured on the job – and will result in unwanted attention from our investigators.”

The BWC’s Special Investigations Employer Fraud Team (EFT) received an anonymous tip that Triple Star Roofing was operating with employees, but reporting to BWC the business had no employees or payroll. Triple Star Roofing workers were interviewed, and said they felt they were employees even though Triple Star classified them as subcontractors and issued them 1099 tax forms. Bank records were analyzed, and the EFT found that checks were issued to the same individuals on a weekly basis with many of them indicating “payroll” in the memo section. In addition, the BWC received and allowed two claims filed by injured workers of the company; those claims were not appealed by Diebert or Scaggs.

Although Scaggs refused to cooperate with an audit for more than two and a half years, BWC did eventually conduct an audit that showed Triple Star Roofing failed to report payroll to the BWC from 2004 to 2008.   This resulted in under-reported premiums of $283,592 for that time period while the business continued to operate

The EFT referred the case to the Wood County prosecutor. Diebert and Scaggs were indicted on third-degree felony charges of workers’ compensation fraud. A jury found both Diebert and Scaggs guilty of the charges on July 15. Sentencing is scheduled for Sept. 13.

Additional charges are pending for the 2009 to 2012 time periods.

To report suspected workers’ compensation fraud, call 1-800-OHIOBWC, visit ohiobwc.com, or visit www.facebook.com/ohiobwcfraud.

Dec. 18, 2014 update: The Court of Appeals of Ohio Sixth Appellate District Wood County reviewed the case and an order was issued on Dec. 15, 2014, vacating their convictions. BWC/SID is currently reviewing the decision with the Wood County Prosecutor’s Office.

Gregory to lead BWC’s fraud investigations department

RickGregoryCOLUMBUS – Ohio Bureau of Workers’ Compensation (BWC) Administrator/CEO Steve Buehrer today announced the selection of Rick Gregory as Director of BWC’s Special Investigations Department (SID). As Director of SID, Gregory will oversee 123 employees who work to deter, detect, investigate and prosecute workers’ compensation fraud. The department pursues cases of claimant, medical provider and em­ployer fraud by identifying savings, recovering dollars, disallowing claims, and pursuing prosecu­tions.

“Rick brings a high level of expertise to this position with more than 30 years in the public sector, and 20 as an executive level leader in law enforcement, public safety and criminal investigations,” said Buehrer.  “I am pleased to have Rick leading our aggressive efforts to identify wrongdoing and return dollars to the State Insurance Fund to protect injured workers’ benefits and keep employers’ pre­miums as low as possible.”

Gregory was most recently Chief of Police for the city of Provo, Utah, where he was responsible for a workforce of more than 150 and recently implemented a new community policing program to prevent crime and enhance effectiveness of the department. He was previously acting public safety director and police chief in New Castle County, Delaware. There, he was responsible for the oversight of all police, emergency medical services, emergency communications and the Office of Emergency Management.

His prior work includes more than 20 years with the Florida Highway Patrol. He received multiple promotions after beginning his career as a Trooper and last served as Lt. Colonel. Among his many duties in that role was assisting in the management of day-to-day operations of the agency to include homeland/domestic security, emergency response, field level investigations and statewide coordination with local, county and state agencies.  

Gregory holds a bachelor of science in business administration from Barry University in Orlando, Florida.  He also attended the Federal Bureau of Investigations National Academy in Quantico, Virginia.

In 2008, Gregory received a personal tribute from both the State of Delaware House of Representatives and the State Senate for outstanding leadership and dedication to the community.

Gregory began his duties today.

BWC investigators uncovered fraud, identified $55 million in savings last year

The Ohio Bureau of Workers’ Compensation (BWC) Special Investigations Department (SID) delivered a report to the agency’s board of directors yesterday highlighting its Fiscal Year 2013 efforts to deter, detect, investigate and prosecute workers’ compensation fraud. Jennifer Saunders, interim director of SID, reported the department identified more than $55 million in savings for the State Insurance Fund after closing more than 2,000 cases involving claimants, employers and medical providers last year.

“Those who would commit fraud need to understand it’s not a victimless crime. They are hurting Ohio’s employers, and making it harder for us to treat truly injured Ohioans,” said BWC Administrator/CEO Steve Buehrer. “Over the past year, we have stepped our efforts to respond to allegations, actively search for signs of fraud, address prescription drug abuse and identify fraud by providers.”

Saunders reported at the Audit Committee meeting the closed cases included 140 criminal convictions and 236 referrals for prosecution. Additionally, administrative review of 915 cases either uncovered fraudulent activity, or identified additional savings for Ohio employers paying into the State Insurance Fund. She also reported on activities of the department’s teams that focus on specific fraud types, including the employer, health care provider team and claimant fraud teams. Results include:

  • The employer fraud team, which investigates fraud committed by employers, closed 226 cases, generating $3,535,468 in savings. The team achieved 43 indictments and 33 convictions during FY 2013.
  • Regional claimant fraud teams closed 1,353 cases, and identified $30,179,976 in savings. These teams secured 100 convictions, or 23.5 percent more than the 81 claimant subject convictions secured during FY 2012.
  • The Health Care Provider Team, which investigates fraud committed by providers, pharmacies, and managed care organizations, closed 68 cases, or 83 percent more than in the previous year. The team identified $11,874,978 in savings to the workers’ compensation system and secured seven convictions.

Saunders also noted the department continues to employ significant resources to combat prescription fraud. The Intelligence Unit requested drug utilization reviews in cases where there was a question of whether BWC-paid prescriptions were medically necessary. The reviews resulted in the termination of drugs in 171 cases where the prescriptions were not necessary, generating $9,467,735 in savings. Drug complaints represented 22.8 percent of all complaints investigated by SID, second only to working while receiving benefits, which represented 28.9 percent of all complaints investigated during the last 12 months.

Finally, Saunders reviewed SID’s presence on Facebook and on Twitter, @ohiobwcfraud. SID uses these social media platforms to notify the public of outstanding fugitives, prosecutions, and anti-fraud efforts, as well as help the public recognize common fraud schemes and report suspected fraud. To report suspected workers’ compensation fraud, call 1-800-OHIOBWC, visit ohiobwc.com, or visit http://www.facebook.com/ohiobwcfraud.

BWC investigations result in eight workers’ comp fraud convictions in June

Columbus – Ohio Bureau of Workers’ Compensation (BWC) Administrator/CEO Steve Buehrer today announced eight individuals were convicted of, or pleaded guilty to, charges related to defrauding Ohio’s workers’ compensation system in June. The court actions are the result of investigations conducted by BWC’s special investigations department (SID). The department works to deter, detect, investigate and prosecute workers’ compensation fraud.

“It is disappointing that anyone – employers, providers, or claimants – would try to cheat the system,” said Buehrer. “It is also unacceptable and why BWC continues to keep such a strong focus on curbing fraud and protecting the State Insurance Fund.”

Following are the cases that resulted in a guilty plea or conviction during June.

James Warren (Rock Creek, Ashtabula County) pleaded guilty to one felony count of workers’ compensation fraud for working while receiving benefits. SID received an allegation on its anonymous fraud hotline that Warren was transporting construction workers to various work sites and also repairing computers for an automobile dealership. Interviews of construction workers and a search of bank records found Warren was a “taxi driver” for them. Records showed Warren repairing computers for his friend’s auto dealership between April 2011 and September 2011. Warren was originally injured as a long distance truck driver. Warren was sentenced to one year in prison, suspended for five years of community control. He was also ordered to pay $21,838.08 in restitution.

Scott Eddy (Parma, Cuyahoga County) pleaded guilty June 3 to 14 felony counts of deception to obtain dangerous drugs, and one misdemeanor count of workers’ compensation fraud. SID received an allegation from the Parma Police Department that they had an open investigation on Scott Eddy for deception to obtain dangerous drugs, also known as doctor shopping. The police department’s investigation found BWC paid for narcotics that Eddy obtained by doctor shopping. SID investigators worked with the Parma police to research, compile and analyze the drug information. Eddy was granted treatment in lieu of conviction and sentenced to two years of community control.

Joshua Cox (Elsmere, Kentucky) pleaded guilty June 5 in the Franklin County Court of Common Pleas to one misdemeanor count of theft for submitting false job searches. SID received an allegation that Cox was working while falsifying job search documents in order to receive living maintenance benefits. These benefits are paid as part of a BWC rehabilitation plan. The investigation found Cox submitted 28 job search forms to BWC indicating he applied to 112 different employers looking for work between November 2011 and January 2012. SID contacted 27 of the employers listed on the job search forms and 23 of them indicated Cox never applied for a job, and verified that the contact person noted by Cox on the job search form was not an employee with its company. Moreover, there were several businesses that were closed or out of business when Cox allegedly applied. Cox was sentenced to 180 days in jail, which was suspended provided he pays $2,708.70 in restitution to BWC, and court costs by July 1, 2014.

Joseph Gaydos (Lakewood, Cuyahoga County) pleaded guilty June 4 in the Franklin County Court of Common Pleas to one misdemeanor count of workers’ compensation fraud for working while receiving benefits. SID began investigating after receiving an allegation that Gaydos was working at a metal fabricating shop while receiving benefits for a workplace injury. It was confirmed through employment records and interviews that Gaydos returned to work as a machine operator and a security guard while receiving temporary total disability and living maintenance benefits.
Gaydos was ordered to repay BWC $9,070.85 in restitution, in addition to $1,000 in investigative costs. He also received a suspended sentence of 30 days in jail.

Steven D. Gooding (Dennison, Tuscarawas County) pleaded guilty June 11 the Franklin County Court of Common Pleas to one felony count of workers’ compensation fraud for working while receiving benefits. SID received an allegation from a Managed Care Organization indicating Gooding may be working a part time job while receiving temporary total disability compensation for a workplace injury. The investigation showed Gooding worked for Natale & Dickerhoof PPL performing maintenance and administrative work during periods when he was receiving the disability compensation. Gooding failed to notify BWC or his physician of his employment. Gooding was ordered to pay restitution in the amount of $22,438.67, and sentenced 180 days in jail, suspended for three years of community control.

Joshua Schlosser (Lima, Allen County) pleaded guilty June 17 in Franklin County Common Pleas Court to one felony count of workers’ compensation fraud for working while receiving benefits.
A wage cross match conducted with the Ohio Department of Job and Family Services identified Schlosser as likely working while receiving benefits for a workplace injury. The investigation found Schlosser performed security work, was a meter reader and worked as a caretaker/maintenance technician for an apartment complex between May of 2007 and September of 2012. The judge placed Schlosser on community control for five years and ordered him to pay restitution to BWC in the amount of $28,919.56. Schlosser must also have a urine screen, maintain/obtain employment and remain violation-free, or he will serve 12 months in the Ohio Department of Rehabilitation and Correction.

To report suspected workers’ compensation fraud, call 1-800-OHIOBWC, visit ohiobwc.com, or visit http://www.facebook.com/ohiobwcfraud.