PORTLAND, ME, June 25, 2012 – A dishonest house painter, who painted himself into a corner of a different kind—workers’ compensation fraud—has pleaded guilty to a Class D misdemeanor of theft by deception and will now pay $9,141 as restitution. Yesterday in Ellsworth District Court, 35 year-old Jeremy Laurendeau of Mt. Desert, Maine was ordered to pay back workers’ compensation insurer MEMIC and volunteer 14 days in an alternative sentencing program at Camp Roosevelt in Eddington, Maine by Volunteers of America.

The fraudulent scheme began in April 2010 when Laurendeau legitimately dislocated his shoulder on the job while working for A Team Painting of Bar Harbor. He did not return to work and a year-long recovery followed. Over the course of that year, he periodically denied any earnings when asked by MEMIC and collected full wage replacement benefits.

Laurendeau’s crime was unwittingly undone by his father who also worked for A Team and who mentioned to the company’s owner that his son had been “doing some stuff” on the island. One small town and hired investigator later, Laurendeau was discovered working odd jobs at a large estate where he earned thousands of dollars for his work. During this time, he had continued to report to MEMIC that he had no other earnings while collecting full workers’ comp benefit. Subpoenaed payment records from the estate served as the final piece of incriminating evidence.

“This is a great example of the slippery slope of insurance fraud. An injured worker fakes a prolonged recovery to continue collecting benefits, and then becomes tempted to make extra money on the side. They probably rationalize that as long as nobody knows, it’s okay,” said John Marr, senior vice president of claims at MEMIC. “But it’s not. Not to his employer. Not to the whole system that is linked financially to other business owners. Not to the honest injured workers who can suffer from the stigma of insurance fraud.”

MEMIC’s efforts to prevent workers’ compensation fraud include an in-house team of investigators as well as outside resources. The in-house team is staffed by former law enforcement officers who abide by strict rules regarding privacy.

While a relatively small percentage of workers’ compensation cases contain elements of outright fraud, the company estimates that its fraud efforts help save its policyholders $2 million each year. The company offers an anonymous workers’ comp fraud tip phone line (1-800-ABUSE WC or 1-800-228-7392) and a form at www.memic.com. 

Employers and others can take some important steps to prevent workers’ compensation fraud.  These include:

1. Promote a fraud-free workplace
Talk to your employees about workers’ compensation. Eliminate misconceptions by explaining what it is, how it works and your zero tolerance stance on fraud. Use posters and employee newsletters to spotlight workers’ comp fraud as a serious crime. Also, let employees know how they can report fraud anonymously.

2. Use sound hiring practices
Stop workers’ comp fraud from the start. Run thorough background checks on would-be employees before hiring. You might be surprised to find past phony workers’ comp claims or other types of fraud convictions. If you have questions about anything you find, ask them to explain.

3. Install video equipment
Monitoring is a proven spoiler of fraud and other workplace crimes.

4. Consider drug testing
Drug users do not make the best employees. They’re unsafe workers and are more likely to file false claims. Spot potential cheats and keep safety a priority by testing for alcohol and drug use. 

5. Have a plan if someone is injured

• Designate someone to be in charge when an injury happens
• Promptly recommend your predetermined medical provider
• Get a description of the accident and injury
• Report the injury right away to your administrator
• Preserve workplace evidence
• Get names of witnesses

6. Start a safety program
Make workplace safety a priority. Hold regular safety meetings. Use posters, flyers and newsletters to stress safety procedures. Reward workers for meeting safety milestones. A safe workplace makes fake injuries harder to legitimize. 

7. Know the red flags of fraud

• Sketchy work history or “job jumper”
• Child support lien
• Extensive criminal record
• Exaggerated details about incident or symptoms
• Co-worker skepticism  

8. Know the role of our special investigation unit (SIU)
SIU is the CSI of the insurance world. Our specialists are trained to investigate signs of doubtful claims, and after thoroughly doing so, they will share their relevant findings with the law. Have suspicions of fraud or abuse? Contact us at 1-800-ABUSEWC or fill out our online report fraud form.

9. Pay attention to worker scuttlebutt
After a workplace injury, and throughout the claims process, rumors of foul play may filter through the workplace. Keeping an ear to the grapevine may help in weighing a claim’s validity. 

10. Pave the way for return to work
Let employees know every attempt will be made to get injured employees well again and back to work. Prepare a written return-to-work plan that includes temporary or alternative duties.

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