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Jail Time For Employers Who Cheat The System

Posted on May 10, 2011

Workers' compensation fraud is not taken lightly. Each year billions of dollars are lost to individuals committing fraud, therefore any person participating in this type of activity should be prepared to face serious consequences if caught. There are several ways in which a person can commit workers' compensation fraud. Employees who fake injuries or exaggerate injuries for the sole purpose of collecting benefits when they could otherwise work is just one example. There are those in the medical profession who report services performed that have not in fact taken place. There are also employers who attempt to reduce costs by encouraging injured workers to not file a claim or reporting information that is incorrect to lower insurance premiums.

As reported in the ClaimsJournal.com, "A New York construction company executive faces multiple felony charges after police say he underreported his payroll to avoid paying premium he owed for workers' compensation insurance."

Workers' compensation insurance premiums are based on the number of employees as well at the types of positions they hold. A construction company will pay higher workers' compensation insurance than a small business owner with a handful of office workers. As a result, some employers attempt to lower insurance premiums as reported by in the ClaimsJournal.com article.

Lowering expenses is a common goal shared by business owners and consumers alike. When doing this involves acts of fraud however it becomes a criminal offense which may be punishable by law. In this case, saving a few thousand dollars might have seemed like a good idea until incarceration became a possibility.