Wednesday, February 15, 2012

Crackdown on Underground Economy...Misclassifcation

Federal and state officials are joining forces to crack down on companies in California that improperly classify workers as independent contractors. 
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L.A. County prosecutors seal deal on conviction of former officer

Los Angeles County prosecutors sealed the deal on the conviction of a former school safety officer in a case that cost the county north of $400,000.
Also convicted, Christie Ann Murphy was sentenced to 180 days in jail and given 5 years probation. A source in the Sutter County District Attorney's office says she was also ordered to repay Travelers nearly $37,000 in restitution for her crime.
And in Ventura County, prosecutors won a conviction against Hector Rocha Villasenor in a case that included an estimated $42,000 in fraudulent payments. Villasenor was convicted of making a knowingly false or fraudulent statement to obtain compensation.

Facebook and Social Networks Used To Catch Fraudsters

Bad actors continue to prey on the workers' compensation system and employers and carriers are paying the price for their fraudulent activity. New tools are being used to combat employee or claimant fraud including social networks such as Facebook.
But new data from the California Department of Insurance (CDI) show that claims administrators, suspicious employers, special investigators and others can aid in the fight by using social networks and smart interviewing techniques to uncover information that leads to prosecutions.  In 2011, the Department says good information helped catch and then convict 103 individuals for various fraudulent acts in and around the workers' comp system.
The dark lining to this silver cloud is that many more cases are still going undetected. And as the 2011 convictions indicate each act of fraud is not only costly to payers -- the overall impact of fraud exceeds $1 billion annually, according to CDI estimates.