L.A. Unified Targets Workers’ Comp Fraud

Signaling the Los Angeles Unified School District’s new crackdown on suspicious workers’ compensation claims, authorities arrested a former food worker Monday on suspicion of fraud and perjury.

The arrest of Mark Bailey, 47, of Hawthorne “demonstrates our zeal,” said David R. Holmquist, the district’s director of risk management and insurance.

Bailey has collected $128,000 in benefits since he claimed to have suffered a debilitating shoulder injury on the job in 1999, district officials said. Investigators discovered that during his leave, Bailey had been working in similar jobs at other school districts, they said.

“This is the first in a series of cases we are now tracking as we redouble our efforts to eliminate fraud that is costing the school district hundred of thousands of dollars in false claims,” Tim Buresh, the district’s chief operating officer, said in a statement.

Previously, district officials investigated claims only if they received a complaint, usually on the district’s hotline, Holmquist said.

In the 2002-03 fiscal year, the district forwarded only one case of alleged workers’ compensation fraud to the district attorney’s office. But last summer, district officials decided to investigate any suspicious claim, Holmquist said. As a result, eight cases were forwarded to prosecutors, he said.

“First and foremost, these people steal our tax dollars,” Holmquist said. “And we are a school district, so that’s like stealing from the kids.”

This year, the district expects to pay $116 million from a budget of about $6 billion for roughly 7,000 compensation claims.

A recent study commissioned by the Los Angeles County Board of Supervisors cited insurance industry estimates that 1% to 30% of claims were false.

County officials have also increased investigations into possible fraud, forwarding 31 cases to the district attorney’s office during the 2002-03 fiscal year, more than double the total of the four previous years.

Since 1997, the county’s workers’ compensation costs have risen from $114 million to an estimated $414 million this fiscal year.