6 City Employees Suspected in Workers’ Comp Fraud : Investigation: Alleged $1-million scheme involving their boss may be wider than first thought, police say.

As many as six employees who help review workers’ compensation claims for the city of Los Angeles are under investigation, suspected of assisting or condoning their supervisor’s alleged scheme that bilked taxpayers out of an estimated $1 million or more, authorities said Monday.

Police said that the network suspected of creating fake worker injury claims may be much more extensive than revealed last week, when they raided the home and office of a top administrator in the city’s Workers’ Compensation Division.

The woman at the center of the probe, Thelma Bowman, remained on a paid leave from her $61,000-a-year post Monday as detectives reviewed records seized from her home, her office and eight other locations.

Interviewed at her Baldwin Hills home Monday morning, Bowman denied any wrongdoing and blamed any irregularities on the city’s troubled workers’ compensation system.

“It’s not true what the city is saying,” said Bowman, standing in her bathrobe and peering through a glass door. “The system is all screwed up. When they look at it, it will come out. It’s all political.”

The criminal probe comes amid scrutiny of the city’s procedures for reviewing and paying claims by injured workers. A task force last month reported that the city could save $32 million if its claims were reduced to the national average. And the City Council will soon consider proposals by Mayor Richard Riordan to turn administration of some workers’ compensation claims over to a private firm.

The immediate criminal probe centers on Bowman, 43, who for six years has supervised about 20 employees. Her unit reviews claims for all city employees except police officers, firefighters and workers for independent departments such as the Department of Water and Power.

As a principal workers’ compensation analyst, Bowman had a “tremendous amount of discretion” and her superiors seldom reviewed claims that she approved, said Phil Henning, assistant general manager of the Personnel Department.

But when the Personnel Department began a routine audit of the division earlier this year, it uncovered suspicious claims. That prompted a wider investigation, which began about a month ago.

Police said they now believe that instead of rooting out fraud and false claims by city employees, Bowman and as many as six co-workers may have defrauded the city themselves.

Los Angeles Police Lt. Ken Welty, who heads the fraud unit of the LAPD’s bunco-forgery division, said the employees are under suspicion of failing to report the activity or helping to fake claims, along with two or three doctors.

A source familiar with the case said that police believe phony injury claims were filed on behalf of workers, some of whom do not exist, and that doctors billed the city for phantom office visits. Investigators theorize that the doctors would then bill the city and, when they were paid, divide the spoils with Bowman, the source said.

“She got her cut and the doctor got his cut and everyone went about their merry way,” the source said.

In simultaneous searches last Thursday, more than 30 detectives and police officers raided Bowman’s home and the city’s Workers’ Compensation Division, which is housed with most of the Personnel Department several blocks east of City Hall. Also searched were at least one doctor’s office and several post office boxes and businesses, Welty said.

Investigators found $46,000 in cash in a safe in Bowman’s home. Also targeted in the search were records for more than 100 people, believed to be either fictitious employees or doctors and private investigators tied to the scheme.

Welty said his investigators have just begun to wade through other documents and evidence, enough to fill six file drawers.

He said it could be a month or more before any charges are filed. “This is going to stack up as a pretty major fraud when it is all done,” Welty said. “It involves a lot of money and a lot of conspirators.”

Bowman has not been arrested.

Authorities said they will be looking for evidence of how she might have spent any ill-gotten gains.

Bowman, who worked her way up from clerk-typist to supervisor, was known among her co-workers as a stylish dresser who wore designer suits and striking jewelry. Some colleagues wondered how she had afforded her two-story, $350,000 Baldwin Hills home.

Bowman’s attorney, Howard Greenberg, said his client does not have a lavish lifestyle. He said Bowman’s neighborhood is “not Beverly Hills or Woodland Hills” and that she owns two modest cars, a 1986 Buick and a 1983 BMW. He added that the cash found in her safe “does not mean she took anything.”

Greenberg portrayed Bowman as a loyal employee with an exemplary work record who is being blamed for errors that really resulted from the general chaos in the city’s Workers’ Compensation Division.

Several observers at City Hall predicted that the case will increase momentum for reform of the city’s workers’ compensation process.

Mayor Richard Riordan and City Atty. James K. Hahn last year appointed a task force of attorneys, accountants, insurers and consultants to study the workers’ compensation system. After months of review, the experts found that:

* The city receives nearly 27 claims per 100 workers, compared to a national average of just over 15 claims.

* The city pays $2,169 per employee for workers’ compensation, compared to $830 nationally.

* Many municipal employees can make more when they are out on disability than when they come to work.

* Workers’ comp claims adjusters who are supposed to stem the tide are grossly overburdened. They handle an average of 1,700 cases each, compared to the industry standard caseload of 250 workers.

Personnel Department officials have not even complied with a 1990 request of the city controller’s office that they issue a manual to tell claims adjusters how they should do their job. The department is too overburdened to complete the task, said Ray Allen, assistant general manager of the Personnel Department.

He said that many of the problems in the Workers’ Compensation Division are the result of the shortage of employees. He said the City Council has considered, and rejected, several requests for more claims adjusters.

Bowman’s lawyer indicated that the problems in the department will become part of her defense.

Greenberg denied that she created any ghost employees, saying that she was a supervisor and that others in the department created new case files.

There was a huge backlog of paperwork and not much time for verification, he said. Mistakes may have been made in the rush to complete the job, but that does not mean that anyone had criminal intent, he said.

“She worked for the city for 24 years and has been a loyal employee,” he said.