Workers' Compensation Fraud

Workers' Compensation Fraud Is A Crime

In California, workers' compensation insurance is a no-fault system. Injured employees need not prove an injury was someone else's fault in order to receive workers' compensation benefits for an on-the-job injury. In addition to medical expenses being covered for injured employees, some injured workers are entitled to recover a portion of lost wages resulting from injury. Fraudulent workers' compensation claims can be an enticing target for criminals.

Workers' compensation insurance fraud occurs in simple and complex schemes that often require difficult and lengthy investigations. Employees may exaggerate or even fabricate injuries. At the other end of the spectrum, white-collar criminals, including doctors and lawyers, entice, pay, and conspire with others to defraud the system by creating false or exaggerated claims, over treating, and over prescribing harmful and addictive drugs. Insurance companies pick up the tab, passing the cost onto policyholders, taxpayers, and the general public.

It is a felony to make a false or fraudulent material statement to obtain or deny any compensation. It is a crime to knowingly assist, conspire with, or solicit any person in an unlawful act of workers’ compensation insurance fraud. It is also a crime to make or cause to be made a knowingly false or fraudulent statement with regard to entitlement to benefits with the intent to discourage an injured worker from claiming benefits or pursuing a claim. Workers’ compensation fraud may be punished by imprisonment in county jail for over one year, or in a state prison for two to five years. A fine may also be imposed not exceeding $150,000, or double the amount of the fraud, whichever is greater. If someone is convicted of workers’ compensation fraud, the court is required to order restitution, including restitution for any medical evaluation or treatment services obtained or provided. A person convicted of workers’ compensation fraud may be charged the costs of the investigation and is ineligible to receive or retain any compensation, where that compensation was owed or received as a result of workers’ compensation fraud. Please see the website for the State of California's Workers' Compensation Fraud Warning.

If employees have knowledge, information or evidence of fraud, please contact Human Resources Management at (310) 243-3771.