Wednesday, February 8, 2012

Worker's Compensation Insurance Fraud

Some of you have seen this list but for those who have not, the allegations for Employer Fraud were nearly $2 billion in 2011: Top 10 Employer/ Insurer Fraud Cases 2011

Total Amount of Alleged Fraud: $1,965,677,626.20
Total Amount of Restitution Ordered or Recovered: 506,050,000.00

1. AIG agrees to pay $450 million in fines for under-reporting $1 billion in workers? comp insurance

American International Group, Inc., AIG, agreed to pay seven insurers $450 million to settle a long-running case over an alleged $1 billion workers? compensation under-reporting scheme.

Insurance Networking News; www.insurancenetworking.com , 04-29-11

2. Small businesses face closure in workers? comp scandal

After the state of New York hit Compensation Risk Managers, an outside administration company that monitored self-insured trusts, with a $400 million lawsuit, the company filed for bankruptcy, leaving the state with no perceived option than to go after the businesses that paid into the trusts. The businesses say they are the victims in this fraud, which totals almost $1 billion. $48 million has been recovered so far.

Crain?s New York Business; www.crainsnewyork.com , 12-09-11

3. Fraudster trades Prada for prison blues- ?Real Housewives? wannabe breaks California workers? comp record

Devon Lynn Kile was sentenced to ten years of probation with a possible ten years in prison for her role in a workers? compensation fraud with her husband, Michael Petronella. The couple under-reported payroll and the number of employees they employed, committing a total of $30 million in insurance fraud. They used their companies as a personal piggy bank to support their lavish lifestyle, which included $500,000 in jewels, Rolex watches, and two Ferrari?s, a Bentley, and a Range Rover. $2.8 million has been ordered in restitution.

Source: http://www.chicagoworkerscompblog.com/2012/02/workers-compensation-insurance-fraud/

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