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BWC secures 11 convictions in May

Ohioans convicted in May of workers’ compensation fraud and related charges include a Cleveland-area man serving time in a federal prison on corruption charges, a former Toledo man working as a home inspector in Tennessee and two men who claimed to be permanently disabled but were earning tens of thousands of dollars working for themselves.

“These cases demonstrate our resolve to stop workers’ compensation fraud and protect the State Insurance Fund,” said BWC Administrator/CEO Sarah Morrison. “Whether you’re in prison or working in another state, we will find you, we will prosecute you and we will recover the funds you improperly acquired so they can be used for those who are legitimately injured on the job.”

As of May 31, BWC’s Special Investigations Department had secured 64 convictions this year on charges related to cheating the workers’ compensation system. Starting with the most recent convictions, May’s cases include:

Richard Claffey of Columbus, Working and Receiving
Claffey pleaded guilty on May 31 to a fifth-degree felony charge of workers’ compensation fraud after investigators found he had collected and sold 46 tons of scrap metal during a time he purported to be disabled.  He was sentenced to five years of community control and ordered to pay $35,000 in restitution to BWC.

Abdikani Diini, dba Aarans Business Center, of Columbus, No Coverage
Diini pleaded guilty May 25 to one count of failure to comply, a second-degree misdemeanor, after investigators found his policy had lapsed shortly after he worked with BWC to reinstate it.

A judge ordered Diini to pay the full balance owed to BWC, $1,021.

Daniel McClellan of the village of Coalton, Working and Receiving
McClellan pleaded guilty May 24 to a first-degree misdemeanor charge of workers’ compensation fraud after BWC investigators found him working multiple jobs while collecting temporary disability benefits for a workplace injury he suffered as a roofer in 2009. A judge ordered McClellan to pay BWC $11,875 in restitution and $4,000 for the cost of its investigation.

Jimmie Rankin of Marion, Working and Receiving
Rankin owes BWC $160,000 after pleading guilty May 17 to a fourth-degree felony charge of workers’ compensation fraud. Rankin, who claimed to be permanently disabled, was also sentenced to five years of community control for collecting BWC benefits after he had gone back to work in the construction industry and deliberately withheld that information from BWC.

Fernando Cruz of Maineville, Working and Receiving
Cruz claimed to be permanently disabled from work while earning more than $100,000 preparing tax returns. He owes BWC nearly $57,000 in restitution after pleading guilty May 12 to a fifth-degree felony conviction for workers’ compensation fraud. A judge also sentenced him to five years of community control.

Herbert Christopher of Shelbyville, Tennessee, Working and Receiving
Christopher, formerly of Toledo, pleaded guilty May 4 in the Franklin County Court of Common Pleas to one count of theft, a fifth-degree felony, after investigators found him working as a home inspector in Tennessee. Sentencing is scheduled for June 23.

Leon Watson of Toledo, dba Leon and Terry Enterprise, Lapsed Coverage
Watson pleaded guilty May 4 to a minor misdemeanor count of failure to comply and was ordered to pay $99 in court costs. Watson made payments totaling $4,481 to the Ohio Attorney General’s office, resolving the balance due on his BWC policy and resulting in the reinstatement of the policy.

Diane Herrick of North Canton, Working and Receiving
Herrick pleaded guilty May 2 to one count of workers’ compensation fraud, a fifth-degree felony, after investigators found her working as a home health aide while receiving BWC benefits. The investigation found Herrick collecting nearly $22,000 while providing numerous activities for two individuals, including household chores, meal preparation, cleaning and shopping. A restitution hearing has been set for June 28.

Kandice Klink Jones of Columbus, Working and Receiving
Jones pleaded guilty May 1 to a fifth-degree count of workers’ compensation fraud after investigators found her working for four separate employers while collecting BWC benefits. She was ordered to pay BWC $12,938 in restitution and sentenced to five years of community control.

James Todt of Brecksville, Working and Receiving
Already serving time in prison on corruption charges, Todt pleaded guilty May 1 to a fifth-degree felony count of workers’ compensation fraud after investigators found he had collected $33,400 from BWC while working in the construction industry. He was sentenced to nine months in prison, to be served concurrently with his current sentence.

To report suspected workers’ compensation fraud, call 1-800-644-6292 or visit bwc.ohio.gov.

Bar owner ignores BWC debt, then pays after liquor agents raid bar

Southwest Ohio man guilty of ‘failure to comply’

A Hamilton bar owner who refused to cooperate with the Ohio Bureau of Workers’ Compensation (BWC) over his lapsed coverage entered a repayment plan with BWC after state liquor control agents raided his bar in early April and seized cash and liquor.

The workers’ compensation coverage for Alleys on the River in Hamilton is now active and in compliance, but owner Michael E. Larkin, 53, has a criminal conviction on his record now after pleading guilty May 31 to a second-degree misdemeanor count of failure to comply. A Hamilton municipal judge fined him $150, sentenced him to two years of community control and ordered that $1,000 of the cash seized in the raid be applied to his BWC debt.

“We made several attempts to help Mr. Larkin bring his lapsed BWC policy into compliance, but he wouldn’t work with us. He didn’t even show up in court for his arraignment after we pressed charges,” said Dan Fodor, assistant director of BWC’s Special Investigations Department (SID). “We subsequently referred his case to the Ohio Liquor Control Commission because he wasn’t meeting his obligation to his employees to carry workers’ comp coverage, which is required by state law.”

The commission suspended Alleys’ liquor license in May 2016, but agents with the Ohio Investigative Unit raided the business on April 6 this year after learning it was still selling alcohol. Agents seized $2,600 in liquor proceeds and nearly 1,500 bottles and cans of beer and liquor. Larkin started his payment plan with BWC the next day, and he has since regained his liquor license.

Fodor said this case illustrates the importance of employers working with BWC to resolve their compliance issues, rather than ignoring them altogether.

“Our employer fraud team actively investigates those that try to cheat the system,” he said. “BWC offers a number of programs that could potentially lower an employer’s premiums. They just need to call and work with us, because ignoring or defying their obligations will only cost them more in the long run.”

To report suspected workers’ compensation fraud, call 1-800-644-6292 or visit bwc.ohio.gov.

Metal scrapper, business owner guilty of work comp fraud

A Columbus man on disability benefits for a workplace injury must reimburse the Ohio Bureau of Workers’ Compensation (BWC) $35,000 after investigators found him collecting and selling 46 tons of scrap metal during a time he purported to be disabled.

Richard Claffey, 53, pleaded guilty Wednesday to a fifth-degree felony count of workers’ compensation fraud in the Franklin County Court of Common Pleas. In addition to restitution, he must serve five years of community control in lieu of six months in prison.

“An anonymous source told us Mr. Claffey was ‘junking’ everyday, picking up refrigerators and stoves and driving through alleys every evening to collect metal and sell it to local scrap yards,” said Jim Wernecke, director of BWC’s Special Investigations Department (SID). “Some might call ‘junking’ more of a hobby than a profession, but we found Mr. Claffey made a living from these efforts, which disqualified him from receiving BWC benefits.”

Claffey suffered a workplace injury in 2010 while working for a landscaping company.

In other fraud news, a Carroll County business owner with lapsed BWC coverage pleaded guilty to workers’ comp fraud after failing to bring his business into compliance despite multiple efforts by BWC staff to help him do so. Investigators found the owner even changed the name of his business and applied for new coverage to avoid paying his BWC debt.

Warren Kelm, owner of Augering Technologies/Coal Auger Pro Inc.,  pleaded guilty to the first-degree misdemeanor April 20 and paid $14,515 toward the balance he owes to BWC.

“We appreciate the financial challenges of running a business, but if an employer is falling behind on their BWC premiums, they need to call us and we’ll work with them,” said SID Director Wernecke. “Cutting corners or trying to cheat the system will always cost them more in the long run.”

Kelm is now operating with proper coverage. A judge sentenced him to three years of community control in lieu of six months in jail.

To report suspected workers’ compensation fraud, call 1-800-644-6292 or visit bwc.ohio.gov.

Fraud conviction costs construction worker $16K

A Jackson County man owes the Ohio Bureau of Workers’ Compensation (BWC) nearly $16,000 after pleading guilty to fraud Wednesday in a Franklin County courtroom.

Daniel McClellan, 36, pleaded guilty to a first-degree misdemeanor charge of workers’ compensation fraud after BWC investigators found him working multiple jobs while collecting temporary disability benefits for a workplace injury he suffered as a roofer in 2009. A judge ordered McClellan to pay BWC $11,875 in restitution and $4,000 for the cost of its investigation.

“Mr. McClellan was not supposed to be working and earning income while receiving these benefits, but we discovered he had been working in construction and other trades as far back as 2012,” said Jim Wernecke, director of BWC’s Special Investigations Department.

McClellan, who lives in the village of Coalton 70 miles southeast of Columbus, was also sentenced to a year of community control in lieu of six months in jail.

To report suspected workers’ compensation fraud, call 1-800-644-6292 or visit bwc.ohio.gov.

Construction worker’s fraud scheme collapses

A Marion man who claimed to be permanently disabled owes the Ohio Bureau of Workers’ Compensation (BWC) $160,000 after pleading guilty Wednesday to a fourth-degree felony charge of workers’ compensation fraud.

Appearing in a Franklin County courtroom, Jimmie Rankin, 45, was also sentenced to five years of community control for collecting BWC benefits after he had gone back to work in the construction industry and deliberately withheld that information from BWC.

“We found Mr. Rankin working as a subcontractor and getting paid with cash and checks made out to other people so he could avoid a paper trail and stay beneath our radar,” said Jim Wernecke, director of BWC’s Special Investigations Department. “But thanks in part to tips from honest citizens, we were able to stop this fraud and bring Mr. Rankin to justice.”

Working with Rankin’s employers, investigators determined Rankin had been employed at least since March 2011, a little more than three years after his workplace injury and while he was collecting temporary disability benefits. He later secured permanent total disability benefits from BWC and, while working, collected those benefits from June 2012 to May 2016.

A judged warned Rankin that if he violates the terms of his community control, he would serve 18 months in prison.

To report suspected workers’ compensation fraud, call 1-800-644-6292 or visit bwc.ohio.gov.

Cincinnati tax preparer convicted of workers’ comp fraud

A Cincinnati-area man who claimed to be permanently disabled from work while earning more than $100,000 preparing tax returns owes the Ohio Bureau of Workers’ Compensation (BWC) nearly $57,000 in restitution.

A judge ordered Fernando Cruz, of Maineville in Warren County, to pay BWC $2,000 up front, followed by payments of at least $150 a month, according to his May 12 sentence on a fifth-degree felony conviction for workers’ compensation fraud.

“Mr. Cruz was supposed to be permanently and totally disabled from work, but we found evidence that he was working as a tax preparer from at least January 2011 through December 2014,” said Jim Wernecke, director of BWC’s Special Investigations Department. “It doesn’t matter if you’re sitting at a desk crunching numbers or spreading asphalt in the hot July sun — if you’re working and earning income, in this case more than $100,000, you’re not permanently disabled and you’re not entitled to BWC benefits.”

Cruz, 68, owes BWC $56,705. A Franklin County judge sentenced him to five years of community control and warned him that he will serve 11 months in jail if he violates the conditions of his control. She also ordered Cruz to return to court Sept. 7 with a financial statement indicating his ability to pay.

To report suspected workers’ compensation fraud, call 1-800-644-6292 or visit bwc.ohio.gov.

Office manager gets diversion program for fudging payroll reports

BWC investigative unit closes 7 fraud cases in April

A Hocking County woman who falsified payroll reports to save her employer more than $52,000 in workers’ compensation premiums will avoid a criminal record for her actions if she successfully completes a diversion program by July 20.

But Carla Mohler must plead guilty to workers’ compensation fraud if she fails to do the following by the July deadline: perform 24 hours of community service, complete a course on controlling workers’ compensation costs and reimburse the Ohio Bureau of Workers’ Compensation $5,167, the cost of investigating her.

“This case is disappointing because we offer a number of programs that could potentially lower an employer’s workers’ compensation premiums,” said BWC Administrator/CEO Sarah Morrison. “All employers need to do is call us and we’ll work with them. Cheating BWC is a perilous path that jeopardizes a company’s future while raising costs for everyone else in the system.”

Mohler, an office manager, has already completed a BWC course on controlling workers’ comp costs, and her employer, the Construction Crew in Logan, reimbursed BWC $52,171 for the premium underpayment.

Mohler’s case was one of seven work comp fraud cases BWC’s Special Investigations Department closed in April. One of those cases, which BWC reported last week, involved a Cleveland doctor who pleaded guilty to felony charges of drug trafficking, workers’ comp fraud and tampering with records.

Dr. Stephen Bernie, 77, paid $30,000 in restitution to BWC and must serve one year of probation in lieu of a six-month jail sentence. Coworker Dianne Javier also paid $30,000 in restitution to BWC and must serve one year of probation after pleading guilty to workers’ comp fraud and tampering with records.

Other cases closed last month and not yet publicly reported by BWC include:

Luebertha Greer of Youngstown, Working and Receiving
Investigators found Greer working as a telephone operator for a medical practice while receiving BWC benefits. She pleaded guilty April 18 to a first-degree misdemeanor count of workers’ compensation fraud. She was sentenced to five years of community control in lieu of 90 days in jail and ordered to pay $2,577 in restitution to BWC.

John O’Rourke of Fredericktown, Working and Receiving
Investigators found O’Rourke knowingly returned to work as a truck driver while receiving BWC benefits. O’Rourke pleaded guilty April 18 to a first-degree misdemeanor count of workers’ compensation fraud. He was sentenced to 30 days jail, which was suspended. He was also ordered to pay $2,002 in restitution to BWC and was placed on community control for two years.

Amy Powers of Fayette, dba R&A Trucking, Lapsed Coverage
Investigators discovered Powers operating a business with multiple employees without valid BWC coverage. BWC referred her case to the Fulton County Prosecutor’s office after several attempts to help Powers bring her policy into compliance with Ohio law. Powers pleaded guilty April 4 to two first-degree misdemeanor counts of attempted workers’ compensation fraud. Powers paid $28,773 in restitution to BWC during her court appearance. Sentencing will be scheduled at a later date.

To report suspected workers’ compensation fraud, call 1-800-644-6292 or visit bwc.ohio.gov.