A Case Of Insurance Fraud

Most of the time when someone thinks of insurance fraud, they think about a staged accident, arson, or something else along these lines, where a person or company is trying to get money out of an insurance company that is not legitamate. Another example is lying on the insurance application. Here is a short story about a company making a false workers compensation report to the State. This case is a California incident but could just as easily have been an incident that happened with a business in the Dallas – Fort Worth area, like Arlington or Grand Prairie, or even out in Weatherford, in Parker County.
This article was found in the Los Angeles Times, in the Business Section. The title of the article is “Staffing Firm Pays $20 Million to Settle Fraud Allegation” and was reported on January 25.
The company, Staffing Services, Inc., was in the business of providing temporary workers to other businesses. They were accused of underpaying premiums to the State Compensation Insurance Fund, the state’s workers’ compensation carrier of last resort. Regulators filed charges against the company on November 26, 2008, accusing it of misrepresenting the number of employees and their job descriptions so it would pay smaller insurance premiums.
The California Insurance Commissioner, Steve Poizner, reached an agreement with the company whereby the business agreed to pay $20 million in restitution and penalties in the workers compensation fraud case. Poizner said, “Business owners have to realize that they have a moral and legal obligation to report the correct number and types of employees and then make sure they have adequate workers’ compensation insurance for those employees. This is not a victimless crime. We all pay when a company chooses not to play by the rules as the rest of us”.
The Los Angeles County district attorney’s office prosecuted the case against Staffing Services, which was settled with a plea bargain on January 15.