To Catch a Cheat : Crime: Private eyes fight insurance fraud by spying on claimants who are at work when they should be home sick.

Private investigators have long spied on malingering workers in Ventura County, hoping to catch them faking pain that keeps them idle and costs millions in bogus workers’ compensation claims.

But with dramatic increases in fraud, tough new state laws are forcing insurance companies to hire more private eyes to watch out for layabouts.

As those laws took effect last year, the number of fraudulent workers’ comp claims referred to state investigators mushroomed. In Ventura County, reported fraud claims jumped from zero in 1991 to 44 in 1992, according to the state Department of Insurance. Statewide the increase rose from 1,865 in 1991 to 8,342 in 1992.

“Fraudulent claims probably account for $1 billion every year in the state,” said Elena Stern, spokeswoman for the office of the California Insurance Commissioner. The rising fraud rate in Ventura County “is quite dramatic and among the most rapid in the state,” she said.

That means more business for Ventura County’s 238 private eyes.

“Five, 10 years ago, it was almost nothing--probably 5% of our business at most,” said Russ Whitmeyer, who runs the largest private investigation firm in the county. “Now it’s probably 60% of our business.”

Ventura-based Russ Whitmeyer Private Investigations Inc. also searches oil rigs and factories for drugs, runs background checks on job candidates and spouses, and advises corporations on security. But 12 of the firm’s 26 employees spy full-time on workers who are at work or play when they are supposed to be home sick.

“It’s easy money, as they see it,” said Ventura investigator Mark Dominguez, who does a lot of work helping insurance companies ferret out malingerers. “I’ve never bothered to ask a claimant who’s been convicted of fraud why they do it, but I’d feel the line would be, ‘To sit back and not work and still make money.’ ”

Dominguez once videotaped a factory worker who was loading a van despite his claim that an elbow injury left his arm nearly useless. The tape shows the man hoisting one bulky piece of furniture after another without a grimace.

Watching the tape again, Dominguez mused, “It goes on for 2 1/2 hours like this.” Dominguez said the man will eventually have to reimburse his insurance company for the benefits.

After 1992 state laws mandated that insurance companies make better-detailed reports of workers’ compensation fraud to the state and set up their own fraud investigation units, insurers began hiring more private investigators than ever.

“A couple of major carriers have started policies where they say, let’s put out $1,000, $1,500 before paying a claim,” said Steve McLean, an Agoura Hills investigator.

“We are finding in excess of 75% to 80% of the claims (we investigate) to be fraudulent, where the person is working or doing something they’re not supposed to do,” McLean said. “It’s just rampant.”

In July, the Ventura County district attorney’s office started its own workers’ comp fraud unit, partly supported by $160,000 in donations from Ventura County employers. The office assigned an investigator and prosecutor to the unit full time to look into cases referred by Ventura county insurers and employers.

But a fraud case is hard to make, said John Geb, supervisor of the district attorney’s consumer fraud unit. Cases cannot be prosecuted unless there is proof that the employee filed and signed a false claim for an injury.

“There’s a lot of room to abuse the system,” Geb said. “It was set up to bring quick benefits to injured workers, and not much was put in place to put a check on fraud or on abuse or overuse of (medical) services. . . . The system can be exploited without it being clearly provable as a criminal case.”

Private investigators are invaluable--without them, probably none of the fraud would be uncovered, said Carol Power, a Ventura insurance claims adjuster.

Power said she once hired an investigator who videotaped a Ventura city employee spending an entire day torch-cutting 2,000 pounds of steel bars at a scrap yard and loading them into his pickup truck while he was supposed to be laid up on workers’ comp with a bad back.

After watching the film, the city cut off his benefits and fired him, she said. And the doctor who had planned back surgery on the man canceled.

“People are very greedy. I think they kind of know we have hundreds of claims here and we can’t watch everybody,” Power said. “As far as saving money, sometimes (hiring investigators) helps us. If you find someone who’s exaggerating their complaint, sometimes sub rosa (undercover) films will influence a workers’ comp judge to grant them fewer dollars.”

Many insurers have a limited amount of money to spend on outside investigators, said John Lane, former Moorpark mayor and a retired 20-year Los Angeles Police Department veteran whose 3-year-old Jigsaw Investigations focuses heavily on such cases.

“On the other hand, when a person is claiming an orthopedic injury that could amount to claims of $50,000 or $100,000 or more, is it worth putting an investigator out there for $1,500, $2,000 to help your case?” Lane asked. “I’ve probably saved insurance companies in the last three years in the neighborhood of $2.5 million.”

A good private investigator checks a worker’s background for previous injuries, pre-existing medical conditions, and--in the case of hard-to-disprove stress claims--evidence of earlier non-job-related stress such as divorce or debt, Lane said.

Then the investigator hits the street. Weekends are the best time.

“That’s when they let their guard down,” Lane said. “You have to follow them from the point of origin, from their business, their house, and you try to stay with them as best you can. Then place your surveillance vehicle where you can watch them. Sometimes you’ll be set up with a perfectly clear view of the person and a van will come up and block your view. It happens all the time.”

Some targets are savvy, Dominguez said.

“I’ve had people come up and look in the windows, knock on the doors, shake the van and see if there’s any response,” he said. “If you just sit there and remain quiet, they leave you alone after awhile.”

Also, private investigators say that discretion is vital.

Gone are the days when a gumshoe could prove a fraud case by flattening a laid-up worker’s tire and taking pictures if the worker came to change it, said Russell Noragon, a Camarillo private eye.

Gone, too, is the brand of private investigator who leaped out of closets in photographic ambush to catch adulterers in the act--although some of those photos still remain in private eyes’ confidential files, Noragon said.

“We’re all very professional here on our ethics,” said Noragon, a former sheriff’s deputy.

“A lot of people have a preconceived notion of what a private investigator does,” he said. The public imagines private eyes as fast-driving, gun-toting macho-men like television’s “Magnum P.I.” Instead, he said, “There’s a lot of sitting, there’s a lot of report-writing. They don’t see that.”

To earn their state licenses, fledgling private investigators must have at least three years’ investigative experience--often earned working for other private investigators--and pass a rigorous examination.

There are questions on photography and ethics as well as matters of civil, criminal and tort law.

“I took it many years ago, and I kind of felt it was aimed at experienced police officers, to show just what kind of authority you no longer have,” Noragon said.

Many private investigators are former police officers who must learn to operate under a new set of rules as civilians.

They can no longer rely on the nationwide police computer network for data, nor on judges for search warrants, nor on their badges for authority to collar people.

Instead, they are limited to poring over public records alongside average citizens, watching from public streets and asking questions with nothing more than their state PI license cards to introduce them.

But it is still investigative work, and the love for it is what drives many retired cops to become investigators.

“I really thought I would miss law enforcement,” said Faith Kipp, who joined Whitmeyer’s firm in February after back surgery forced her retirement from a five-year career as a sheriff’s deputy.

“But this provides a lot of the same thing,” Kipp said. “A lot of times you start off with just a small bit of information and you systematically watch it grow and unfold due to your efforts until you reach the end . . . whether it be a case you end up turning over to law enforcement or a workers’ compensation where you find fraud and abuse.”

Workers’ comp cases aside, private investigators still count on bread-and-butter jobs such as finding missing persons, tracing bad debtors, shadowing philandering spouses, sniffing out thieving employees and preparing murder defendants’ cases for trial.

Michael Jarosz, a 22-year veteran investigator in Ventura, has helped defense lawyers prepare for trials of some of the region’s most infamous murder defendants.

He traveled from the heart of Mexico to the northernmost border of Washington state in the early 1980s, helping Whitmeyer’s firm track down a witness who later exonerated Los Angles transient Bobby Joe Maxwell in one of the 10 “Skid Row Stabber” murders. Ultimately, Maxwell was sentenced to life in prison for two others in the string of slayings.

Jarosz also gathered information for the defense of Gregory Scott Smith, now on Death Row for kidnaping, molesting and murdering an 8-year-old Northridge boy and burning his body in 1990.

Criminal defense investigators must probe deeper than police or prosecutors, digging for information that could help prove a defendant’s innocence, he said.

The work haunts him sometimes, invading his dreams.

“God, there’s so many of them,” sighed Jarosz, a former Port Hueneme policeman. “You do enough of these and every time you go by someone’s house or the place where someone was murdered you remember what happened to them.”

But the reward comes in helping undermine a prosecution case against someone who was wrongly accused, Jarosz said. “(In) the criminal justice system, there’s got to be somebody that investigates the other side. . . . The defendant hires an attorney and he has a right to as thorough an investigation as possible to make sure he gets a fair trial. If he’s guilty, he’ll be found guilty.”

Veteran defense attorney George Eskin said he relies heavily on private investigators to unearth information that may win an acquittal or a lighter sentence in a case that sprang from incomplete evidence.

Police sometimes build their case against someone based on a description of a crime by the first witness they interview, whose information may lead the prosecution down the wrong path, Eskin said.

“Investigators are able frequently to turn up witnesses who are ignored or were not turned up by police initially,” Eskin said. “I think that they perform an extremely valuable service in the criminal process.”

But some investigators refuse to help accused criminals.

“We spent too many years putting people away to try to get them off the hook,” said Braden McKinley, former chief investigator for the county district attorney’s office, who retired to start his own firm with two partners. “For the most part, people are guilty as charged.”

Instead, McKinley--along with Tom Odle, a retired county sheriff’s homicide detective, and Michael Durkin, a former hotel executive--has built a 7-month-old investigative firm on corporate security work, background checks, body guarding and a variety of other fields.

Posing as bar-goers or guests, they try to spot hotel employees shortchanging the till, stealing supplies or unwittingly exposing guests to potential burglary.

But they also handle old-fashioned missing-persons cases such as one in which three teen-age Santa Barbara girls faked their own drownings in Lake Tahoe and then disappeared for good.

“It’s our belief they met with a criminal death,” McKinley said. “We were instrumental in putting together information that the original agency didn’t have time to do.” As a result, police are re-examining the case as a possible homicide, he said.

Whitmeyer established his firm in 1976 with his wife, Lita, a former sheriff’s clerk.

Criminal defense work fascinated him. He once helped win acquittals for two men in a case by building a model of the scene with plastic cowboys and Indians pierced with needles that were tied together with string to show the bullet trajectories. But after a few years, he got burned out on that kind of work.

Overnight, Whitmeyer said, he turned the firm away from the criminal defense “and starved for the next two years” to build a business in corporate work such as narcotics interdiction, background checks and high-tech security.

Using his experience as a former sheriff’s narcotics detective, he developed an anti-drug program for corporations using urine tests and a string of drug-sniffing dogs that are taken around the country to inspect workers’ lockers and cars for evidence of drug use.

The firm even sends investigators on request to job sites to check the workers’ eyes for signs of narcotics, Whitmeyer said.

“Nobody in the whole country had ever taken a police approach” to rooting out drug use on the job, Whitmeyer said. “What I started doing is checking employees on the job for drug impairment. We were finding 30%, 40%, even 50% in some places showing some impairment on the job.”

As diverse as investigative work is, it requires a special breed, Noragon said.

“It takes somebody who’s curious, somebody who’s low-key, somebody who’s able to get people to talk,” he said.

Private investigators fill a gap that would otherwise be left void by public investigators, Dominguez said.

“Society looks toward us at times to answer questions that somebody else has maybe left unanswered,” he said. “And it’s very gratifying when we’re able to do that.”