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Ohio business owners owe more than $800K following fraud-related convictions

William H. Foster III

Three Northeast Ohio men owe the Ohio Bureau of Workers’ Compensation (BWC) more than $800,000 after investigators discovered they were operating their businesses without workers’ compensation coverage.

“These business owners learned the hard way they cannot operate their business without workers’ compensation coverage, and now they owe us hundreds of thousands of dollars,” said BWC Administrator/CEO Stephanie McCloud. “I’m pleased our investigators stopped these employers from continuing to break the law and cheat our system.”

William H. Foster III, owner of American Construction Group LTD, pleaded guilty Feb. 11 in a Summit County courtroom to a second-degree misdemeanor of obstructing official business after failing to work with BWC to reinstate his policy. A judge sentenced Foster to credit for time served in jail and to follow the payment agreement he made with the BWC and the Ohio Attorney General’s Office to reinstate his policy. Foster owes BWC more than $360,000 in past premiums and penalties.

Paul “Bob” Collier Jr.

In Stark County, Paul “Bob” Collier Jr. and Miklos Fioretto pleaded guilty on Jan. 17 and Feb. 5, respectively, to a fourth-degree felony charge of workers’ compensation fraud for failing to maintain coverage on their East Sparta, Ohio, business. Investigators discovered that Fioretto and Collier changed the name of their pallet manufacturing business to avoid paying past premiums and penalties associated with the business.

Both men were sentenced to three years of community service. A condition of probation is to pay BWC restitution of $458,125.

In other news: A Columbus woman was ordered to pay BWC $6,941 in restitution on Tuesday after pleading guilty to a first-degree misdemeanor charge of workers’ compensation fraud.

BWC investigators discovered Jamia Smith, 39, working for a staffing firm while concealing that information from BWC to continue collecting disability benefits. A judge also sentenced Smith to three years of probation in lieu of six months in jail.

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

Woman convicted for cashing dead mother’s workers’ comp benefits

Alabama fraudster owes BWC $18,000

An Alabama woman was convicted of workers’ compensation fraud last month after investigators discovered she was cashing her deceased mother’s workers’ comp checks more than a year after her mother died.

Patricia Barney pleaded guilty Jan. 23 in a Franklin County courtroom to a fifth-degree felony charge of workers’ compensation fraud. A judge sentenced Barney to five years of probation and ordered her to pay the Ohio Bureau of Workers’ Compensation (BWC) $18,000 in restitution.

“Ms. Barney was clearly not the intended recipient of these benefits, and I’m pleased we brought her fraudulent activity to an end,” said BWC Administrator/CEO Stephanie McCloud.

BWC’s Special Investigations Department found Barney, who was an authorized user on a bank account where her mother’s BWC benefit payments were being directly deposited, continued to use funds on the account after her mother passed away in January 2017. She did so until May 2018 without notifying BWC.

Other convictions in January include:

Shawn Ferrer of Canton, Ohio
Ferrer pleaded guilty Jan. 28 in Franklin County Court to one count of workers’ compensation fraud, a first-degree misdemeanor, for working while receiving disability checks. A judge ordered Ferrer to pay $1,599 in restitution to BWC and sentenced to 90 days in jail and six months of probation.

Glenn Cummings and Jack Cummings, dba Cummings Moving & Storage of Dayton, Ohio Glenn and Jack Cummings owed BWC more $9,600 in premiums and penalties after they were convicted of operating their business without workers’ compensation coverage since September 2017.

Jack Cummings pleaded guilty Jan. 21 Dayton Municipal Court to one minor misdemeanor count of failure to comply and was sentenced to pay a $50 fine and court costs. Glenn Cummings pleaded guilty Jan. 23 to one minor misdemeanor count of failure to comply and was sentenced to pay a $25 fine and court costs. BWC reinstated their policy Jan. 21 after the Cummings paid their premiums and established a reinstatement payment plan.

Barton Carmichael, dba Haul Away Containers Inc, Bigdumpster.com LLC, and Wastetran LTD of Akron, Ohio
Carmichael pleaded guilty Jan. 21 in Franklin County to one amended charge of theft, a first-degree misdemeanor, for operating his businesses without workers’ compensation coverage. A judge ordered Carmichael to pay $14,329 to BWC in restitution. His 180-day jail sentence was suspended.

Todd Bennett, dba Rent-A-Vision, McConnelsville, Ohio
Bennett pleaded guilty Jan. 6 in Morgan County Court to two counts of failure to comply, both second-degree misdemeanors, for operating his business without workers’ compensation. A judge ordered Bennett to pay $50 in fines plus court costs for each count.

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

How employers can prevent workers’ compensation fraud

February 7, 2020 1 comment

By Dan Fodor, Assistant Director, BWC Special Investigations Department

Workers’ compensation fraud can be costly, so it’s important to know how to protect your organization. Here are five ways you can prevent fraud.

1. Make employees aware of workers’ compensation fraud. Employees should know that workers’ compensation fraud has a price. Individuals who are caught may face a felony criminal record.

2. Promote a zero-tolerance fraud policy. Promoting a zero-tolerance policy encourages employees to be active in reporting and preventing fraud. Ensure that employees are aware of how and where they can report suspected fraud at any time.

3. Know the red flags. As an employer, it is important to know the indicators of potential fraud while reviewing incident reports. Some of these red flags include:

    • Late reporting of the incident without a reasonable explanation.
    • Inconsistent descriptions of initial report of injury.
    • The individual is hard to reach.
    • Individuals who perform seasonal work that is about to end when they file a claim.

4. Create safe working conditions. Prioritizing the safety of your employees is an effective method in preventing fraud. Train your employees to identify possible safety hazards at work and how to report them.

5. Use your resources. If you suspect an individual of fraud, contact BWC’s Special Investigations Department and let them investigate. Special investigations professionals pursue cases of claims fraud, medical provider fraud or employer fraud. Also, if you suspect other organizations may be operating without workers’ comp coverage, you should contact BWC.

If you suspect workers’ compensation fraud, submit a Fraud Allegation Form or call 1-800-644-6292, and follow the options.

Fraudulent billing leads to occupational therapist’s conviction

Agency secures 6 fraud-related convictions in December   

A northeast Ohio occupational therapist was convicted last month for felony workers’ compensation fraud for billing the Ohio Bureau of Workers’ Compensation (BWC) for treatment services she did not provide to patients.

Susanna Kagalitskaya Freedman, of Euclid, pleaded guilty Dec. 17 in a Cuyahoga County court to a fifth-degree felony count of workers’ compensation fraud. The judge sentenced her to five years of probation and a $2,500 fine. Additionally, Freedman was permanently decertified to treat BWC patients for claim-related injuries.

“As an agency, we expect providers to give superior care and service to injured workers,” said BWC Administrator/CEO Stephanie McCloud. “This particular provider obviously did not meet the standard of care injured workers deserve and she cheated our system.”

Numerous red flags in Freedman’s billing practices and treatment notes sent to BWC prompted BWC’s Special Investigations Department (SID) to initiate an investigation starting in October 2017. Investigators discovered Freedman was falsifying documents, indicating services had been rendered when they had not. BWC would then pay for the substandard care based on the falsified information Freedman provided.

SID secured five other fraud-related convictions in December, bringing calendar year 2019’s total to 94.

Jeffrey Jakob of Toledo
Jakob pleaded guilty Dec. 31 in Toledo Municipal Court to one count of failure to comply, a second-degree misdemeanor, after BWC found he was operating his business, J.A. Jakob Marine Contracting, with lapsed coverage since March 2015. BWC agents made multiple attempts to assist Jakob in getting his coverage reinstated, but he failed to do so. The judge ordered him to one year of probation and to comply with a reinstatement payment plan with the Ohio Attorney General’s office. He must also remain current on installment payments to BWC.

Harold Brown of Bellefontaine
Brown pleaded guilty Dec. 23 to three second-degree misdemeanor charges of failure to comply for running his business, Brown’s Lawn & Tree Service, without workers’ compensation coverage. BWC investigators discovered his BWC policy had been lapsed since September 2010. Brown received 30 days in jail (suspended), a $250 fine, and was ordered to make regular payments to BWC and the Attorney General until a reinstatement payment plan was paid in full. The current amount due on Brown’s BWC policy is approximately $133,000.

Marie Olinger of Delta
On Dec. 17, a Franklin County judged ordered Olinger to three years of community control for working while receiving more than $2,800 in disability benefits from BWC. The investigation found Olinger had returned to work at the Dental Center of Northwest Ohio between January and March 2017 while receiving temporary total disability benefits.

Rodney Filibeck of Mansfield
Filibeck pleaded guilty Dec. 16 in Franklin County Common Pleas Court to one count of workers’ compensation fraud, a first-degree misdemeanor. After receiving an anonymous tip, BWC investigators determined Filibeck was working construction jobs while receiving BWC disability benefits between September 2016 and June 2017. The judge handed down a 60-day jail sentence, suspended for 12 months of community control and ordered him to pay $2,519 in restitution to BWC.

Deangelo Speed of Shaker Heights
Speed pleaded guilty Dec. 2 in a Franklin County courtroom to a fifth-degree felony count of workers’ compensation fraud. BWC agents found Speed working as a truck driver while collecting BWC benefits from Oct. 20, 2015, through Jan. 27, 2017. The judge ordered Speed to pay BWC $7,599 in restitution and court costs by March 2, 2020. The judge also sentenced Speed to a six-month jail sentence, suspended for six months of probation.

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

Spreading joy is a tradition here at BWC

Each year our agency supports local charities.

In December 2019, we supported the following:

FireFighters 4 Kids Toy Drive (gifts); Franklin County Children Services Holiday Wish (cash donation); and the Beach House Family Shelter (supplies) located in Toledo, Ohio. #giveback

The gifts pictured left were delivered to the Columbus area FireFighters 4 Kids Toy Drive today.

 

 

 

An appreciative Columbus area firefighter pictured below coordinated receipt of the gifts by the local FireFighters 4 Kids Toy Drive.

 

 

 

 

 

 

 

 

 

 

 

On Thursday, December 19, the gifts pictured below were delivered to the Beach House Family Shelter located in Toledo, Ohio.

   

The gifts below will be donated to Richland County Children’s Services.

 

Thanks to our BWC executives and SID employees for these generous donations that will benefit local charities.
Categories: SID Information Tags: ,

Northeast Ohio business owners owe BWC nearly $1.3 million following fraud convictions

Two northeast Ohio businessmen must pay the Ohio Bureau of Workers’ Compensation (BWC) nearly $1.3 million in restitution following their recent convictions on multiple fraud charges in separate, unrelated cases.

“We look forward to recouping these dollars and directing them where they belong — taking care of injured workers, creating safe workplaces, and giving employers excellent coverage and service,” said BWC Administrator/CEO Stephanie McCloud.

Sentenced Monday in a Cuyahoga County courtroom, Robert E. Fitz must pay BWC $961,956 in monthly installments and serve five years of probation for his Sept. 30 conviction on a fourth-degree felony charge of workers’ compensation fraud.

Fitz, an attorney and owner of Action Maids residential cleaning company in Westlake, Ohio, had refused to cooperate with BWC to bring his lapsed policy into compliance, leaving the agency to pick up the costs on 43 injury claims since 2003, five in the last five years.

On Oct. 21 in Stark County, a judge ordered an Alliance man to pay BWC $300,230 in restitution after BWC found him defrauding the agency in multiple ways, including working at two businesses he owned while collecting workers’ compensation for work injuries he claimed left him permanently and totally disabled.

Roger L. Kale, Jr., 51, also must serve five years of probation and perform 100 hours of community service. BWC’s Special Investigations Department also found the following:

  • To establish his compensation rate for his 2009 workplace injury, Kale reported wages for himself that were higher than what he reported on his BWC payroll reports for all of his employees combined.
  • Kale operated A-1 Brosch Tree Service without workers’ compensation coverage required by Ohio law.
  • Kale under-reported his payroll and misclassified his employees to lower the cost of his BWC premiums.
  • Kale presented clients an altered BWC certificate of coverage to make it appear his business had coverage when it did not. One client reported Kale to BWC.

Video obtained from the Ohio State Highway Patrol shows Kale operating a tow truck while claiming to be permanently disabled.

Kale pleaded guilty to one count of tampering with records, a fourth-degree felony; three counts of workers’ compensation fraud, all fourth-degree felonies, and two first-degree misdemeanor charges of workers’ compensation fraud.

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

Cincinnati caterer convicted of workers’ comp fraud

November 1, 2019 1 comment

Woman ran catering business while collecting disability benefits

 

A Cincinnati woman claiming to be permanently disabled from work owes the Ohio Bureau of Workers’ Compensation (BWC) nearly $41,000 after her felony conviction Oct. 24 for workers’ compensation fraud.

Michelle D. Smith, 57, pleaded guilty to the fifth-degree felony in the Franklin County Common Pleas Court after BWC discovered she owned and ran two businesses, Expression Unique LLC and Later in Life Brides, while collecting BWC benefits for workers deemed permanently and totally disabled.

“Our Special Investigations Department found records indicating Ms. Smith worked 35 hours per week at her businesses,” said BWC Administrator/CEO Stephanie McCloud. “I don’t think that meets anyone’s definition of ‘permanently and totally disabled,’ let alone BWC’s.”

Smith, who was injured on a job in 2000, declined through her attorney to be interviewed by BWC investigators about her case. Investigators gleaned much of their evidence from customer interviews and a catering contract Smith had with the city of Cincinnati.

A Franklin County judge ordered Smith to pay BWC $40,873 dollars in restitution and serve five years of non-reporting community control (probation). If she violates her probation, she must serve a year in prison.

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