There Are Different Ways to Commit Fraud in Workers’ Compensation Cases in NJ
Worker’s compensation fraud is very common, and some people commit fraud without realizing it. For example, if a person lies about an injury that did not occur while they were working, lies about whether or not they are working while collecting benefits, or lies about how serious the injury is, can be considered worker’s compensation fraud.
Employers can commit fraud by lying about how they classify their employees or the amount of payroll on their expenses. Also, if an employer fails to obtain worker’s compensation insurance coverage, they can be liable for not only fraud but for much more severe penalties.
When accused of fraud, the experienced workers’ compensation attorneys at Cohen & Riechelson will explain all of the options available to you. Many times, the allegations are falsely made by insurance companies so that they do not have to pay out any benefits. False worker’s compensation fraud allegations are very common. However, it is extremely important to gather as much evidence as possible in fighting an allegation of fraud. Our renowned law firm, Cohen & Riechelson, is dedicated to helping employees and employers in workers’ comp legal matters in Hamilton, Burlington, Robbinsville, Lawrence, East Windsor, Ewing, Princeton, Trenton, and towns across Mercer County, Middlesex County, Burlington County, and New Jersey. Contact us at 609-528-2596 if you have questions or need assistance with a case.
What Qualifies as Fraud in Workers’ Compensation Claims in NJ?
Under NJSA 34:15-57.4, there are ways an employee can commit worker’s compensation fraud. If the alleged fraud falls under this statute, the accused stands to be charged with a fourth-degree indictable crime. For example, if someone misrepresents or lies about any fact that is essential in obtaining benefits, they have committed fraud as it is defined in NJSA 34:15-57.4. Mainly, no misrepresentations can be made in order to wrongfully collect worker’s compensation benefits.
Furthermore, employers must obtain worker’s compensation coverage insurance, and they cannot force employees, by any means, to make a false statement or misrepresentation in order to be able to claim benefits. Employers are also prohibited from trying to escape worker’s compensation liability or the payment of any premiums.
If the court finds that any section or subsection of the statute was “knowingly” or “purposely” violated, the employee or employer is liable for an indictable crime and conviction according to NJSA 34:15-57.4(d).
Employees Committing Fraud
When an employee commits worker’s compensation fraud, they face severe penalties civilly, criminally, and administratively. Civilly, someone who commits worker’s compensation fraud they are liable for paying back all of the benefits they claimed plus interest owed back to the employer or insurance carrier. Criminally, the person may be facing a fourth-degree indictable crime which is punishable by incarceration in a state prison and hefty fines. Administratively, the benefits can be terminated immediately, and whatever has been claimed already plus the interest, can be deducted from any benefits that could be claimed in the future.
Employers Committing Fraud
When an employer commits worker’s compensation fraud by either failing to obtain insurance coverage or by lying about something essential to a claim, they also may face very severe penalties. If an employer fails to provide worker’s compensation insurance coverage, thus violating NJSA 34:15-120.1(c) and NJSA 34:15-79. If an employer fails to purchase the required insurance coverage, they are facing a disorderly persons charge. Disorderly persons offenses are not as severe as indictable offenses but they are still punishable by up to six months in jail and expensive fines. Furthermore, for every day that the employer fails to provide coverage, they can be ordered to pay up to $5,000. Civil penalties can also be imposed. This includes a $1,000 penalty and a 15% assessment of the total judgment not to exceed 5,000.
If the court determines that the lack of insurance coverage was willful (“knowingly” or “purposely”) then the employer faces a fourth-degree indictable charge, which is much more severe than a disorderly persons offense.
The Significant Impact of NJ Workers’ Compensation Fraud
Insurance fraud of any kind can have very significant impacts that are not readily seen by the person or organization committing the fraud. Insurance providers have a specified amount of money that they are able to use to pay out to claims and this is determined by the amount of premiums they are receiving. If fraud is committed by either an employee or an employer, this pool of money is greatly affected and it can have a detrimental impact on innocent parties.
Pertinent Case Law Regarding Worker’s Compensation Fraud
In Liability Insurance vs. Techdan, L.L.C. the court held that the Comparative Negligence Act should have been applied and that treble damages should have been awarded since the defendants display a pattern of fraudulent behavior. This case involved two employers that did not properly classify their employees and evaded the payment of their premiums for their worker’s compensation insurance coverage. Ultimately the court held that the defendants owed $681,000 in compensatory damages. This tells us that employers and employees engaging in worker’s compensation insurance fraud can be liable for tort damages up to triple the original amount (treble damages).
Liability Insurance vs. Techdan, L.L.C. has also taught us that employers can be charged with second-degree theft by deception. The defendants in this case forged payroll records in order to reduce their premium payments to their insurance carrier. When a worker’s compensation claim is brought by an employer, carrier, or third-party, the burden of proof is on them to prove that a fraudulent statement was made concerning a crucial fact of the case and that the misrepresentation was made with the purpose of collecting benefits. The case also shows the distinction between the Workers’ Compensation Fraud Act and the Insurance Fraud Prevention Act. The IFPA allows for treble damages, but the WCFA does not. Both statutes give power to a judge to determine findings of fraud. Worker’s compensation judges are given a lot of power in these statutes. Specifically, the judge may order a dismissal or the repayment of wrongfully collected benefits with interest. Both statutes also allow reasonable attorneys’ fees to be paid to the winning party.
Contact Workers‘ Compensation Lawyers Handling Fraud Cases in Middlesex County, Burlington County, and Mercer County, NJ
Our exceptionally qualified lawyers at Cohen & Riechelson can help you compile enough evidence to successfully defend against an allegation of worker’s compensation fraud. Evidence may include social media posts, camera footage, medical records, and witness testimony, among other things. By defending you and undermining your accuser’s argument, the evidence offered to the court by our legal team can aid in successfully protecting what benefits you are entitled to.
We can also help to ensure your protection from whatever civil and/or criminal liability you may be exposed to. With over 50 years of experience handling workers’ compensation cases in Lambertville, Hopewell, West Windsor, Woodbridge, Ewing, and throughout Burlington and Mercer County, you can rest assured that your case is in good hands. Call us now at 609-528-2596 to discuss the details of your fraud case.