December 9, 2011
SUPERINTENDENT LAWSKY REPORTS ON LATEST RESULTS OF DRIVE TO SAVE BUSINESSES MONEY BY FIGHTING WORKERS’ COMPENSATION FRAUD
Sweep Results in 18 Arrests in 13 Counties Around the State
Benjamin M. Lawsky, Superintendent of the Financial Services, today announced that 18 people in 13 New York counties have been arrested in the latest effort to save businesses money by cracking down on workers’ compensation fraud.
“Workers’ compensation fraud is a serious crime that victimizes honest businesses and taxpayers who are forced to shoulder the burden of higher premiums. Strong anti-fraud activities complement the state’s ongoing work to drive down the cost of workers’ compensation insurance,” Superintendent Lawsky said. “Fraud jeopardizes New York businesses and makes them less competitive because it needlessly drives up the cost of workers’ compensation insurance, a form of insurance designed to provide wage replacement and medical benefits to employees who suffer legitimate job-related injuries.”
Workers’ compensation fraud is a crime that affects consumers and businesses in New York State in many ways. Far from being a victimless crime, it victimizes every resident and business enterprise every day. Insurers must make up for every dollar paid out because of insurance fraud with a commensurate increase in premiums, thereby increasing their cost of doing business in the State. It discourages business growth and prosperity.
Similarly, workers’ compensation fraud costs consumers millions of dollars every year in the form of increased insurance premiums and higher prices for goods and services. In many ways, insurance fraud increases every resident and business owner’s cost of living while decreasing the quality of life in our State.
When unscrupulous individuals collect benefits while they are working and earning a salary, they are cheating the system that was established to compensate those who have legitimately been injured on the job and need financial support until they can return to work. Workers’ compensation benefits provide that support.
“We can all help fight worker’s compensation fraud. If you suspect insurance fraud, report it to the Department of Financial Services’ Insurance Frauds Bureau. Together we can make a difference,” Lawsky said.
Audits of workers’ compensation claims by insurers, as well as investigations by DFS and enforcement agencies, such as the OIG, are designed to fight workers’ compensation fraud and ensure that New York businesses and legitimate workers’ compensation claimants are protected.
These arrests were the result of a series of joint investigations led by the Department of Financial Services (DFS). Joining DFS in the investigations were the Office of the Inspector General (OIG) of the New York State Workers' Compensation Board, the New York State Insurance Fund (NYSIF) and other insurers.
The 18 arrests included:
Albany County -- Charles Foster, 48, of Hoosick Falls, collected $22,800 in benefits after hurting his leg when cutting down a tree while employed by the Village of Hoosick Falls in February 2010. However, investigators found that he was managing a storage facility and running a scrap metal business while collecting the benefits from NYSIF. He is charged with workers’ compensation fraud.
Schenectady County -- Lee Kittle, 49, of Scotia, collected $22,600 in compensation from NYSIF after suffering an injury while employed at a mill in 1993. He was found to be working at Schenectady County Community College as a tutor and the Saratoga Race Track as a teller. He gave authorities a written confession. He is charged with offering a false instrument for filing in the first degree and workers’ compensation fraud.
Erie County – John Czechowski, 45, of West Seneca, collected $12,000 from NYSIF after he was classified as totally disabled for a back injury he suffered working as a roofer. However, investigators discovered he was working off the books for a contracting company while collecting the benefits. He is charged with third degree insurance fraud, grand larceny, offering a false instrument for filing and workers’ compensation fraud.
Onondaga County -- Kemberlei Senke, 44, of Liverpool, is accused of claimant fraud for collecting $26,000 in benefits issued by NYSIF between June 2009 and January 2011. She reported suffering a knee injury while employed by Artistry in Wood. The investigation disclosed that she falsified reports to the NYSIF to inflate her wages and employment status. She is charged with insurance fraud in the third degree, offering a false instrument for filing in the first degree and workers’ compensation fraud.
Onondaga County -- Cheryl LaQuay, 62, of Calcium, is accused of fraudulently collecting $53,000 in benefits from the NYSIF between Oct. 2006 and Sept. 2011, while working as a home health aide. She is charged with insurance fraud in the second degree, offering a false instrument for filing in the first degree and workers’ compensation fraud.
Oneida County -- Aaron McElhinney, 26, of Vernon, is accused of collecting $11,600 in benefits from Chartis Insurance Company after falsely reporting that he suffered a work-related injury. Investigators found that he told his girlfriend and her mother that he was going to fake the injury so he could go to Florida. Co-workers corroborated that he did not hurt himself. He is charged with insurance fraud in the third degree and workers’ compensation fraud.
Oneida County -- William Ellis, 43, of Utica, admitted working for a construction company from 2004 through 2007 doing roofing, siding, plumbing and masonry while collecting $15,000 in benefits from NYSIF for an injury he suffered while working for a paving and excavating company in 1993.
Oneida County – William O'Neil, 30, of Rome, is accused of collecting $1,790 in benefits from 21st Century North American Insurance Company while working for a moving company. He was collecting benefits after suffering an injury while working as a carpenter. He is also accused of giving false testimony at a workers’ compensation hearing and causing a false independent medical examination report to be prepared and filed as part of his claim. He is charged with perjury in the first degree and workers’ compensation fraud.
Ulster County -- Sergio Cortez, 37, of Rosendale, collected $6,800 in benefits from NYSIF after claiming he suffered a slip and fall injury while working as a carpenter for ABD Stratford LLC in September 2009. However, investigators found that he was working as a landscaper while collecting benefits. He is charged with insurance fraud in the third degree and workers’ compensation fraud.
Ulster County -- Willie Dixon, 47, of New Paltz, collected benefits from NYSIF for an injury he reportedly suffered while working for the New York State Office of Family and Children Services in May 2010. An investigation revealed he failed to disclose on work activity reports that he was employed as a coach while collecting $4,700 in benefits. He is charged with insurance fraud in the third degree and workers’ compensation fraud.
Ulster County – James Roy, 51, Hyde Park, is accused of attempting to collect benefits after falsely reporting that he suffered a work-related injury while employed by a tool-making company. He claimed that the injury occurred when he slipped on ice in the company’s parking lot, but witnesses contradicted his claim. He never received compensation because his claim was discovered to be false before benefits were issued. He is charged with workers’ compensation fraud.
Otsego County -- Susan Gridley, 61, of Schuyler Lake, started collecting benefits after an injury she sustained while working at a horse farm in 1986. She later failed to disclose on work activity reports submitted to the NYSIF that she was working as horse boarder and trainer while collecting $4,700 in benefits.
Oswego County -- Kimberly Harrington, 53, of Lacona, is accused of cashing her dead husband’s workers’ compensation benefit checks totaling $2461.90. The checks were issued by the NYSIF. She is charged with grand larceny in the fourth degree.
Warren County -- Jeffrey Hamblin, 45, of Glens Falls, reportedly suffered a knee injury while employed as a truck driver for HR Logic/Doberts Dairy in November 2001. An investigation revealed he was employed as a general contractor for Painters Plus and worked for a doctor while collecting $7,700 in benefits from Liberty Mutual Insurance Company. He is charged with falsifying business records in the first degree and insurance fraud in the third degree.
Chenango County – Patricia Wilcox, 60, of Oxford, started collecting benefits from NYSIF after claiming she suffered a broken ankle while working as a teacher’s aide at the Chenango County Head Start program. Investigators found that her injury actually occurred at her home. She fraudulently collected $12,900 in benefits. She is charged with falsifying business records in the first degree and workers’ compensation fraud.
Tompkins County – Steven Odum, 65, of Ithaca, is accused of failing to disclose work activity as the lead guitarist with the “Steve Odum Trio” on reports he sent to the NYSIF while collecting $11,300 in benefits after suffering an injury in 1988 while working at a residential child care institution. He is charged with offering a false instrument for filing in the first degree and workers’ compensation fraud.
Clinton County – Leonard Drown, 63, of Morrisonville, is accused of collecting $25,500 in benefits from Pennsylvania Manufacturers Association Insurance Company after claiming that he was not working because of an injury. Investigators found that he was, in fact, working while collecting the benefits.
Broome County – Olga Shelestovsky, 43, of Johnson City, is accused of working as a waitress while collecting $2,200 in benefits from NYSIF and claiming that she was unable to do any physical work. She is charged with offering a false instrument for filing in the first degree and workers’ compensation fraud.
All of the accused are innocent until proven guilty.
The investigations and arrests were carried out by investigators assigned to DFS’s upstate offices under the supervision of Assistant Chief Investigator Sean Ralph and under the overall direction of Angelo Carbone, Frauds Bureau Assistant Director, Frank Orlando, DFS Frauds Bureau Director, and Joy Feigenbaum, Executive Deputy Superintendent for Frauds and Consumer Services.