Man Trapped by Lobsters

PORTLAND, Maine, December 20, 2006 – Crustaceans and clams starred as unlikely informants in a workers' compensation fraud case in Hancock County. An almost three-year case of "something's fishy" finally ended today with the sentencing of William Fennelly, of Lamoine, to a seven month jail sentence for two felony counts of perjury.

Fennelly collected incapacity benefits for a back injury suffered while working for boat builder John M. Williams Company in December of 2000. In March 2002, when benefits were stopped due to earnings he reported from another company, D.P. Bradley and Display Concepts, he initiated another back injury claim days later.

This red flag led investigators to something else red: the lobsters he sold for money while he simultaneously collected workers' compensation.

"Workers' comp fraud is a quiet crime that everyone pays for one way or another," said John Marr, senior vice president of claims at MEMIC, the workers' compensation insurer for both of Fennelly's employers. "Deceit has costly impact on insurers, employers and especially legitimately injured workers, who fall under suspicion by association. The backbone of the workers' comp system is honesty."

In the case of Fennelly, he thwarted attempts to find the truth by spinning elaborate tales and got caught under oath. MEMIC's special investigation unit quickly uncovered Fennelly's valid fishing and lobstering licenses. A sweep of local lobster pounds led to Trenton Bridge Lobster Pound, where he sold catches of lobsters and clams between May 2001 and June 2002.

As investigators trawled deeper, the truth got murkier. Not only was Fennelly commercial fishing while collecting workers' compensation, he was also employed at the Town of Lamoine Transfer Station and earned wages as a sternman aboard another boat-none of which he reported to MEMIC, which he was obligated to do by Maine law.

Fennelly's explanations tangled into contradictions over the course of three hearings.

Under oath, he repeatedly denied working. When confronted with Trenton Bridge Lobster Pound records, he said he didn't make "one penny" and declared he only drove the boat to train an apprentice. He then testified there was no way to prove earnings because he did not have a bank account due to back child support that he owed.

When a subpoena turned up two bank accounts, one with deposited checks from the lobster pound, a new story of fronting the apprentice with workers' comp money for bait unfolded. But, Fennelly had no answer as to why he deposited a Trenton Bridge check, a MEMIC check and a Town of Lamoine check all on the same day. And evidence to confirm the apprenticeship story never materialized.

Workers' comp fraud in the U.S. is estimated at $3 billion a year by the American Insurance Association. Insurance industry watchdog the National Insurance Crime Bureau nearly doubles it to $5 billion. The difficulty in measuring fraud, experts say, is that much of it goes undetected. "

Some people see insurance fraud as wager low on risk and high in gains. And some insurers pay suspect claims too readily," said Marr. "At MEMIC, we have a zero tolerance approach on fraud. At the end of the day, we hope a story like Mr. Fennelly's deters others from even thinking about cheating the system."

To report a potential fraud or abuse tip anonymously-regardless if your company is insured by MEMIC-call 1-800-ABUSE WC (1-800-228-7392) or visit


A super-regional workers’ compensation specialty insurer rated “A” (Excellent) by A.M. Best, The MEMIC Group insures more than 20,000 employers and their estimated 300,000 employees. Licensed across the country with more than $1.2 billion in assets, The MEMIC Group is a leading carrier in the Northeast with a growing profile across the Eastern Seaboard. Offices are located in New Hampshire, Connecticut, New York, New Jersey, Pennsylvania, Virginia and Florida, in addition to the headquarters in Portland, Maine.