Firms Urged to Sleuth Workers’ Comp Fraud

Business owners hoping to prosecute employees for fraudulent workers’ compensation claims need to play detective before reporting cases to the new fraud unit in the Ventura County district attorney’s office, the unit’s lead attorney said Friday.

The fraud unit, which opened in June, has yet to prosecute a case because complaints so far have not included evidence that could stand up in court, Deputy Dist. Atty. Rhonda Schmidt told a gathering of 170 business leaders from Simi Valley and Moorpark.

“It is on your shoulders to do the investigating, and I’m standing here saying please do that so we can have some cases to prosecute,” Schmidt told the crowd at an all-day seminar sponsored by the Simi Valley Unified School District.

Prosecutors need employers to interview friends, neighbors and family members of the claimant, Schmidt said. Be specific, she said. For example, instead of accepting weight loss as a symptom of a work-related illness, ask how much weight was lost and over what period of time, she said.

Simi Valley school board member Doug Crosse said he pushed for the informational seminar because the district is the city’s largest employer. The rising cost of workers’ compensation is a major concern of most businesses and governments, he said.

When employees file false claims to collect workers’ comp benefits, the schools are hit in the pocketbook just as businesses are, Crosse said.

“Unfortunately, we can’t leave the state,” he said.

Along with agricultural interests, a coalition of Ventura County’s public schools donated much of the money being used to finance the district attorney’s new workers’ comp fraud unit.

The issue resonates for school officials because the money for workers’ compensation insurance and benefits comes out of a district’s general fund, Crosse said.

“Unlike free-enterprise employers, workers’ compensation costs don’t come out of profits,” Crosse said. “They come out of the classroom.”

Other speakers at the seminar included experts on how to make the workplace safer and reduce workers’ compensation claims. Also at the seminar were Assemblywoman Paula Boland (R-Granada Hills) and a member of the staff of state Sen. Cathie Wright (R-Simi Valley).

Last month, the Legislature passed a major overhaul of the workers’ compensation system intended to cut $1.5 billion from the cost of $11-billion-a-year system, mainly at the expense of doctors, lawyers, rehabilitation specialists and others.

However, most business people think the reform did not go far enough, said Gary Spellman, a floor-covering contractor in Simi Valley who attended the seminar to improve his knowledge of the system.

“But most people feel at least it’s a start,” said Spellman, who complained that the new laws doesn’t address the issue of contractors who pay employees under the table to avoid the costs of workers’ compensation insurance.

Mark Strait, a Simi Valley roofing contractor, said he pays 48 cents into workers’ compensation for every dollar he pays an employee. At that rate, it’s hard to compete with unscrupulous contractors who pay their workers cash to avoid insurance requirements, he said.

“The guy that is legitimate is at a disadvantage,” Strait said.

Participants also were asked to sign petitions encouraging legislators to continue reforming the system.

“A number of people here today have said the work isn’t over yet, and the people here represent literally thousands of local job opportunities,” Crosse said.