Nailed

Ohio catches workers' comp cheats in the act

Tue, 15 May 2012 13:22:42 -0700

Ohio workers’ comp investigators can deploy an arsenal of fraud-fighting tools, including a surveillance van straight out of a Hollywood movie.

Investigators gave an Ohio TV news station a taste of the fraud cases their cameras have helped to expose.

Second perfume company accused of cheating workers

Thu, 10 May 2012 10:20:51 -0700

At least two King County companies have come under the scrutiny of L&I’s Employment Standards program in recent weeks for their hiring and wage practices.

KOMO News detailed the types of complaints workers have made about these companies that they say never paid them for their work. L&I’s Liz Smith, manager of the Employment Standards program, was interviewed for this story.

L&I’s investigation remains open.

Dry weather means paving scams return

Tue, 08 May 2012 12:20:00 -0700

Every year, L&I sees unwary property owners fall victim to paving scams, like this Eastern Washington woman who was recently interviewed by KIMA-TV.

Homeowners should first visit www.HiringAContractor.Lni.wa.gov to make sure the contractor they plan to hire is registered with the state.

Check with L&I before you sign anything!

Mulinski in jail awaiting sentencing

Thu, 03 May 2012 13:11:00 -0700

Infamous former contractor John Mulinski, convicted in Montana last December of three counts of wire fraud, is now in jail awaiting sentencing after he asked a judge for a new sentencing date and a new lawyer.

Mulinski’s fraudulent activities have been detailed in earlier Nailed posts. He is currently scheduled to be sentenced May 21 and faces up to 20 years in federal prison. Mulinski already faces 17 counts of theft in King County Superior Court.

Cracking down on wage theft

Thu, 26 Apr 2012 14:17:39 -0700

By Liz Smith, Guest Contributor

What would you do, today, if your paycheck just didn’t show up?

Imagine you spent the last month working full time and come payday, your employer said your paycheck would not be coming. Could you pay your mortgage or rent? Would you have money in savings to help you get by? How would you make it work?

If you’re like a lot of workers, it would be a nightmare. Unfortunately, around 4,000 workers every year file a wage complaint with L&I alleging that their employers did not pay them at all, or that their employers paid them less than they were owed.

Washington state workers who believe that they are not properly paid by their employers can file a wage complaint with L&I’s Employment Standards Office. From there, here’s what we would do:

Assign the case to an agent to investigate and try to resolve the matter.
Following a thorough, evidence-based investigation, determine whether wages are owed and if the employer can’t or won’t pay, issue a citation.
If no wages are owed, or that there isn’t enough proof of the violation, issue a Determination of Compliance.

Sometimes, L&I issues a citation and the employer still won’t pay. In those cases, L&I collections agents can file liens against property and vehicles, find and freeze bank accounts, and even garnish wages. Employers will also get listed on the online list of wage law violators.

Employers and workers can appeal our decisions.

Our focus is on doing a sound and timely investigation and then, if wages are owed, collecting the money and getting the wages to the workers.

For those 4,000 complaints filed last year, L&I collected and returned more than $2 million in unpaid wages to workers.

Everyone agrees that businesses that do not pay their workers should not get a competitive advantage over honest businesses that follow the law. At L&I, we are working hard to make sure this doesn’t happen.

Liz Smith is Program Manager for L&I’s Employment Standards program, working to ensure compliance for wage payments and working conditions by employers in Washington State.

Fraud-fighting program issues 2011 results

Mon, 23 Apr 2012 15:06:00 -0700

We’ve posted our 2011 annual report and, as you’ll see, it was a busy year with the fraud team setting several records on fraud investigations and amount of money recovered.

In Fiscal Year 2011, the program brought in nearly $8 for every dollar invested. Return on investment compares the division’s operating costs to the money recovered, collected and avoided during the fiscal year.

IMPORTANT RESULTS

L&I’s fraud-fighting and collection activities produced substantial and measurable results:

Assessed a record $30 million in unpaid employer premiums plus penalties.
Completed a record 5,558 investigations:
- Checked validity for 847 claims.
- Completed 4,711 activity checks and investigations to identify potential fraud or abuse.
Identified $5.7 million in provider overpayments and penalties.
Collected a record $135.2 million in employer premiums.
Recouped $1.9 million in premiums through the Contract Release Unit.
Identified unpaid premiums for a record-setting 69 percent of the employers we targeted for audits.

Read the complete 2011 Annual Report to the Legislature for additional detail.

Guilty plea in long-running fraud case

Tue, 10 Apr 2012 15:24:14 -0700

L&I auditors and the state Attorney General’s Office recently won a conviction of a Spokane electrical contractor.

On Feb. 29, Harold E. Stone, owner of the Electric Company, agreed to plead guilty to two counts of False Reporting and pay restitution in the amount of $17,762.78, which includes both workers’ comp premiums owed plus a penalty. Stone, 81, avoided paying workers’ comp premiums for years by paying workers in cash, failing to report some of his employees, and underreporting hours worked of others.

Before this became a criminal matter, L&I tried to work with Stone auditing the Electric Company repeatedly between 2005 and 2009. Each time, auditors gave Stone specific instructions on how to maintain his records and properly report the hours his employees worked.

Despite this, Stone failed time and again to follow record keeping and reporting regulations. In interviews, he acknowledged to auditors that he paid workers in cash and knowingly failed to report their hours to L&I.

Stone does not face any jail time, but civil collection proceedings will move forward.

Drug-dealing cop’s 'other job' nets a fraud

Wed, 04 Apr 2012 11:59:33 -0700

I found this piece about an injured Ohio police officer, who must repay past workers’ comp benefits to the state because his drug-dealing counted as employment. L&I tries hard to get injured workers back to work, but I don’t think this is what we had in mind.

Homeowner on the hook after contractor fails to pay supplier

Wed, 28 Mar 2012 12:00:05 -0700

The title of this KING 5 story says it all: What you need to know before hiring a contractor.

KING 5’s Jesse Jones does a good job explaining that a contractor’s bond offers some protection, but has its limits, as this homeowner learned when the contractor she hired failed to pay his supplier. Learn how to protect yourself with L&I’s Basics for Homeowners page.

Misclassification scheme nets staffing exec over 4 years in prison

Tue, 20 Mar 2012 12:00:06 -0700

I wonder if this employer and employee will be sharing the same prison cell.

The employee, turned in to authorities by his boss for embezzlement (of which he was later convicted), in turn told investigators about his boss’s on-going scheme of misclassifying employees to avoid paying almost $800,000 in workers’ compensation premiums.

For Washington State employers, L&I offers The ABCs of Classifications in Washington, with detailed information on how classifications are applied to different types of businesses.

King County Considers Wage Theft Law

Tue, 13 Mar 2012 13:49:23 -0700

Wage-theft protections for workers have increased over the past few years. The change is one result of an effort by workers’ rights advocates and governments to raise the public profile of wage theft—failure by an employer to pay their workers as required by law. Crosscut’s report describes recent efforts in King County, along with details of L&I’s ongoing efforts to ensure workers receive their due.

Home-improvement season triggers look at repairs gone wrong

Wed, 07 Mar 2012 15:22:19 -0800

Two local television reports expose risks involved in routine home-repair projects. KOMO TV exposes the hazards of hiring a contractor without first checking their registration and references. KING TV’s Jesse Jones looks at the consequences of misplaced trust. Check out L&I’s tips and tools for homeowners to protect themselves and their investment from these and other dangers, before you too get your 15 seconds of fame the hard way!

Hidden Cost of Unpaid Internship

Thu, 16 Feb 2012 10:49:24 -0800

Check out this thoughtful roundtable on unpaid internships. So, who do you think covers these interns for on-the-job injuries? Unless the internship meets some strict requirements, interns must be reported as employees for purposes of wages and workers’ compensation insurance. Check out L&I’s fact sheet to learn more.

New Beginnings in the New Year

Tue, 07 Feb 2012 11:47:45 -0800

Well, it is one month into a new year and what a year it has been so far.

I want to begin my first Nailed column by thanking my predecessor, Carl Hammersburg, for his kind words and his many years of dedicated service to L&I. I’m sure we all wish Carl the best as he continues to fight fraud in new ways.

As some of you regulars to Nailed may know, I have been with L&I several years, most recently as the Fraud Detection and Operations Manager. With Carl’s departure, I will be wearing a new hat as Acting Fraud Prevention and Compliance Manager.

Here at L&I, as Carl has said, we have come a long way in our fight against fraud thanks to the help of the Governor, the Legislature and, most importantly, the citizens of Washington, who have given us so many tips, leads and suggestions for improvement.

In the coming year, I expect our fight against fraud will continue to make progress.

You may have heard the radio ads from our campaign to raise awareness of workers’ compensation fraud and direct people to the website, suspectfraud.com, an interagency site that collects tips on potential fraud. The campaign began in early January and includes ads with the same messages on the websites of several newspapers across the state. In the spring, our focus will be aimed at employer fraud.
We plan to do more outreach and education activities in the spring to help people understand the rules so we can aim our enforcement efforts towards those who knowingly cheat the system.
Later this week, I’ll be meeting with the U.S. Department of Labor to see how we can improve our information sharing and coordinate enforcement efforts. You might remember we recently signed a memorandum of understanding with the Labor Department. This is just one example of how we are working with others to try and make the system better for everyone.

Ultimately, fraud prevention is about fairness and ensuring benefits are available to those who are truly in need. By working together, we can help keep costs lower and ensure a level playing field for everyone. If you suspect fraud, let us know! Whether it is:

An employer not paying their workers or cheating on their taxes.
Someone working under the table while also collecting benefits.
A medical provider billing for services they did not provide.

Last year, with your help, L&I’s fraud prevention efforts found or avoided more than $40 million in unpaid employer premiums, improper medical bills, and inappropriate benefit payments to workers as a result of our fraud fighting efforts.

In the coming year, I believe we will do even more. Ultimately though, I hope that we reach a place where we make the price of cheating so high, it will be a competitive advantage to play by the rules because the cheaters know they will get caught.

Passing the torch

Fri, 30 Dec 2011 10:11:00 -0800

By Carl Hammersburg

It has been more than seven years since I began running L&I’s Fraud Prevention and Compliance Program, and nearly 20 years since I first joined this agency.

Now, it’s time for me to head for new challenges.

With the New Year, I will be leaving my position here at L&I and handing the reins over to the capable Doric Olson, currently our Fraud Operations and Detection Manager.

We have come a long way since 2004, when I first took this position.

In that time, L&I added people and resources to the fight against fraud, and got key support from the Governor and the Legislature.

While much important legislation was passed, the Joint Legislative Task Force on the Underground Economy in Construction proved critical in shining a light on the dangers to both workers and honest business owners from unregistered contractors.

During the past seven years:

· We improved systems, processes and training for staff and made huge leaps in productivity and effectiveness.

· We added new or improved data-sharing agreements with other state and federal agencies to improve our targeting efforts.

· We implemented new tools for homeowners, general contractors, workers and the public to research businesses, see their workers’ compensation coverage, and learn if they are a registered contractor.

Connecting with the citizens of Washington has been a huge help in the fight against fraud. Media campaigns, the Nailed blog you are reading, and other outreach boosted the number of referrals we received. And those referrals have paid off to the tune of millions of dollars recovered every year.

To anyone reading this who gave us one or more of those referrals, I cannot thank you enough.

We are making great strides in detecting the right workers, medical providers and businesses to investigate, but that doesn’t substitute for first-hand knowledge. Taking the step to submit a referral is a big one, and I know it feels very risky, but these investigations help keep costs down and make the system fair for everyone.

Here are some numbers - since July 2004, when Fraud Prevention and Compliance formed as a program, the agency has:

· Audited over 33,000 businesses, assessing $160 million

· Investigated more than 34,000 claims, generating $66 million in cost avoidance and assessments

· Audited more than 1,700 providers, generating $57 million in assessments and costs avoided

· Collected over $916 million in total

· Maintained 100% conviction rate on criminal cases that were charged

· Provided long-term benefit to workers’ compensation with a return averaging $8 for every $1 spent

With all of that, there is room to improve and Doric, I’m confident, will ensure that happen as he puts his own stamp on the program.

He will have the benefit of an exemplary staff as he works on improved targeting of our audits, as well as increasing their quality and timeliness.

As for me, while I am leaving the public sector, I will continue to work with various government agencies in the fight against fraud.

I wish Doric and the rest of the staff here the best and will stay in touch. I remain a citizen of Washington State and, as such, stopping fraud and abuse in workers’ compensation means as much to me as it always has.

Thank you for your support. It has been an amazing ride.

One homeowner’s $1,500 lesson in unregistered contractors

Wed, 21 Dec 2011 12:00:05 -0800

One homeowner’s $1,500 lesson in unregistered contractors :

This article in the Tri-City Herald of a home-improvement project gone wrong also tells homeowners how to get it right – before laying down their money – check with L&I before it’s too late!

Mulinski convicted in federal court

Fri, 16 Dec 2011 09:18:00 -0800

On Dec. 9, a federal jury in Missoula, Montana, convicted John Mulinski (a Nailed frequent-flyer) of three counts of wire fraud, a federal crime. He is scheduled to be sentenced March 23 and faces up to 20 years in federal prison. Mulinski already faces 17 counts of theft in King County Superior Court.

I’ll bet these guys aren’t registered!

Fri, 09 Dec 2011 12:00:05 -0800

I’ll bet these guys aren’t registered!:

Let me say it again, check out anyone you are considering hiring to work on your home, before you sign anything – and definitely before you let them inside your home!

L&I investment earns interest from investigation authority

Thu, 08 Dec 2011 12:00:05 -0800

L&I investment earns interest from investigation authority:

It is always nice to get an ‘independent’ confirmation of one’s successes. At the risk of injury by way of patting myself on the back, check out Daniel W. Draz’s article on L&I’s fraud prevention strategy.

Mulinski goes to trial in Montana

Tue, 06 Dec 2011 15:21:00 -0800

You probably remember the case against John Mulinski, the King County contractor facing 17 counts of theft after taking deposits for work he allegedly didn’t complete.

Mulinski is facing charges in Montana for pulling the same scam, and his trial there starts this week. Check out the update on this story from KING5’s Jesse Jones.