Workers Compensation Fraud Investigation || 6 signs of workers comp fraud?

Updated: May 31

Table of Contents

1. Workers’ Compensation

2. Workers’ Compensation Claim

3. Workers’ Compensation Fraud

4. 6 Signs of Workers’ Comp Fraud

5. Workers’ Compensation Fraud Investigation

6. FAQs on Workers Compensation Fraud Investigation


If you're here we're sure you are interested to know the details about the workers compensation fraud investigation. Before we get there, let us understand what exactly is a workers compensation fraud.


Workers' Compensation


A worker is an individual who works on payroll, for an employer. And Workers’ Compensation is the benefits that the said worker will receive for his liabilities.


Now, what liabilities are we talking about here?


Liabilities, in this context, means the monetary losses and health impairments that the worker has sustained. This mostly includes things like the wages for days when he did not come to work, the fee that he paid for appointments with his attorney and the expenses that he incurred to pay his medical bills.



Workers Comp construction workers
Workers Comp construction workers


Workers’ Compensation Claim


A Workers’ Compensation Claim protects both the employee and his employer.

If a workman ever gets injured while carrying out his employment duties, then he can file for a Workers’ Compensation Claim. The workers’ compensation will compensate for their losses. Workers’ Compensation covers everything from the cost of medical treatments to death benefits.


If you are an employer, then you are in a legally safe place in more ways than one. Your employer can not sue you under the Workers’ Compensation Law. Also, it will become mandatory for you to buy a Workers’ Compensation License, not doing which is equivalent to committing a felony if you have a business, with employees on the payroll.


But exceptions can always arise, and there can be a case where an employee can get around the Workers’ Compensation Claim and still file a lawsuit against his employer if he thinks that his employer deliberately hurt him.


Workers’ Compensation Fraud


Workers’ Compensation can be a lifeline for workers injured on the job. It can keep them afloat financially until they are ready to get back to work. But money can corrupt even the noblest of men and the only reason why most people do jobs is so that they can make money.


It’s no surprise that not all of the employees have their company’s best interests at heart. Everyone is looking to make more money and if being morally flexible sometimes is what it takes then people would do it without hesitation.


Workers’ Compensation is strictly meant for workers who have lost their ability to earn but people try to exploit the system by faking injuries. And that is essentially what Workers’ Compensation Fraud is.


Lying about or misrepresenting your injury to claim Workers’ Compensation benefits is considered as Workers’ Compensation Fraud. Every 1 in every 10 Workers’ Compensation Claims in California is bogus. Millions of dollars of taxpayer money are being claimed by people who do not work and those who get injured are facing undeserved hardships.


In recent years, this fraud has taken widespread form like a plague and it costs the taxpayers an estimated $10 billion annually to pay for these fraudulent claims. Among insurance frauds, workers’ compensation fraud claims the number 1 spot.


A woman by the name of Cathy Cashwell was caught on the television show “The Price is Right”, in her Workers’ Compensation Fraud. She was cashing in $3000 per month for being unable to ‘stand, run, reach or grasp’ due to an on-the-job shoulder injury. And during that same time, she was seen on this show jumping, running, and spinning a giant wheel.


6 Signs of Workers’ Compensation Fraud


After a Workers’ Compensation Claim is filed, there are a few things that are straight red flags for the workers’ compensation insurance companies:


1. There are no witnesses who can corroborate.

2. Employee’s refusal to undergo medical diagnosis.

3. Inconsistencies in the employee’s description of the incident

4. The employee is hard to reach while he is ‘out injured’

5. The employee has filed for a claim just after being terminated

6. There has been evidence of an employee doing something, that would have been impossible in case of his ‘claimed injury’


The last point is where most workers’ compensation frauds are busted. Most workers try to fake injuries like back pain or mental trauma where it is not easy to determine if the injury really exists. Even if the workers are injured, they might try to exaggerate the extent of the injury to gain long-term workers’ compensation benefits.


Workers’ Compensation Fraud Investigation


The rising number of Workers’ Compensation Frauds has led to the insurance companies taking extreme steps to uncover workers’ compensation fraud. Workers Compensation fraud investigation can include anything from stalking their social media accounts to secretly making videos of them.


The very first thing that the insurance companies do is to ask workers compensation fraud investigation questions to the claimants and if they are not convinced then they hire private investigators. And these private investigators are usually willing to take things far. The task assigned to them is quite simple but not easy. They have to gather any shred of evidence against the worker that proves his injury otherwise. The injury for which he is bagging the workers’ compensation benefits.


Here are a few things that private investigators do to uncover workers’ compensation frauds during their workers compensation fraud investigation:


1. Video Surveillance


This one is perhaps the most obvious thing that will come to a person’s mind even if he is not a private investigator hired by an insurance company. But as much as this is obvious, this is also the fastest way to catch the workers’ comp fraudsters red-handed. It is the private investigators’ idea of a brute-force approach and many times they slam a home run.

If a worker is cashing in workers’ compensation benefits for a back injury that does not let him/her stand for a long period, walk for a long distance, or lift weights beyond a certain margin then that worker is expected not to be seen doing any of those things.


And this is where the private investigators find their prey. They would field themselves with a hidden camera near the so-called injured workers' house or follow them to wherever they are going and keep them under constant surveillance.


Sooner or later they (workers) are bound to do something that would prove their injury otherwise if they are not injured. This is a textbook workers’ comp private investigator tactic.

Here are some interesting examples:



Workers Compensation Fraud Investigation
Workers Compensation Fraud Investigation

The woman in this frame is a nurse who has been getting workers’ compensation benefits because of back pain that restricts her from lifting any weight over 10 pounds. But she can be seen here lifting a ‘40-pound bag of dog food into the trolley which (bag) she will later unload into her car after pushing the trolley to her car.




Another case where a worker was caught on video helping his friend move a refrigerator while reaping benefits of workers’ comp wages because of a ‘severe back pain’.


The case of Daniel Farny (1997)


This is one of the more popular cases which happened at a time when Workers’ Compensation Frauds were at their peak. This eventually led to workers’ comp investigation being carried out with more strictness in California and new laws added to the Workers’ Compensation Act.



workers compensation fraud investigations
workers compensation fraud investigations

The 33-year-old veteran of the Oceanside Fire Department and a 3rd-year law student, Daniel Farny was living on workers’ compensation money set at ‘50% of his salary for life’ equivalent to $700,000. According to Farney, he ‘suffered a back injury so debilitating’ that he ‘could not even work a desk job’.

But the insurance company was not convinced and they hired a private investigator named Ted Koerner who went as far as tailing Farny to Hawaii where he was on an exotic vacation with his family.


And this is one of many things that Ted Koerner captured in a video footage which destroys Farny’s workers’ compensation claim - lifting 3 stuffed bags of luggage (in the picture), giving a piggyback ride to his daughter and jumping around at the beach.


Koerner went so close to Farny that he even eavesdropped on Farny at a dinner table where he confessed his fraud by saying, ‘I guess when we get back there it will be time for me to start having back pain again’.


This case gives an insight into workers comp private investigator rules. Which are none. They have no rules. These investigators are willing to go to extreme lengths to uncover suspected claims frauds and what Koerner did here is just everyday workers compensation surveillance video insurance fraud investigation.

This case just sums up workers compensation investigations and what they look for.


2. Social Media Hunting


It is just a convenient coincidence that social media took off during the prime era of Workers’ Compensation Fraud and it gave workers’ comp fraud investigators more ways to carry out their jobs. And stalking social media profiles of suspected claimants is a part of it.


The private investigators would keep a close eye on the social networking activity of any suspect which mostly means the photos that they post or are a part of. These investigators go as far as sending friend requests to the suspects on Facebook.


They only need to find one picture where a worker who complained of breathing issues, due to passive smoking at her workplace, is seen holding a cigarette in her hand.



workers comp fraud investigation using social network.
workers comp fraud investigation using social network.

The person in the picture is Vincent LaMantia, a former cop, was accused of falsifying workers compensation claims as he complained about suffering from post-traumatic stress disorder (PTSD) due to his job and collected money in excess of $150,000.


This picture has been dug up from the Facebook account of Jennifer LaMantia, most likely his wife, which reveals the location of the post as Cigombong, Indonesia, a popular tourist destination.


Credits: https://www.youtube.com/watch?v=xzub2SCf3qA
Watch Video: https://www.youtube.com/watch?v=xzub2SCf3qA

In this other picture, Vincent LaMantia can be seen bragging about having a second job while being on workers’ compensation for PTSD.


These pictures are enough evidence to kill Vincent LaMantia’s case. The bottom line here is, fraud investigators have sharp eyes and disclosing a fraudulent claim through evidence from social media is the least of what they do.


Workers compensation surveillance insurance fraud investigations and stalking social media profiles of claimants are just the first two pages in the book of Workers Comp Fraud Investigator Jobs.


They also do other things such as talk to neighbors and relatives, run background and record checks, or in extreme cases, going undercover and getting inside the claimant’s social circle. Nowadays with the advancement of technology, we have workers compensation fraud detection software and sometimes even artificial intelligence is used to perform workers compensation predictive modeling fraud detection.


See how: Klear.ai Can help you detect Claimant Fraud with its Advanced AI Workers Comp Fraud Detection Software


FAQs on Workers Compensation Fraud Investigation


Q1 - How to report Workers’ Compensation fraud?

Ans1 - There is usually a centralized hotline number for every state where people can report potential Workers’ Compensation Frauds anonymously. Call: 1 800 795 4451


Q2 - What are workers comp investigators allowed to do?

Ans2 - There is no definite word on what they are allowed to do but they can do anything that gets them evidence to kill the claim. It includes things like:

- Put suspects under surveillance, video or microphone, without their prior knowledge

- Stalking their social media accounts

- Talking to their closed ones

- Doing background checks of their records and personal life

The line is drawn where they start to breach the suspect’s right to privacy or the stalking takes the form of harassment. That is something they are not allowed to do.


Q3 - Is workers comp fraud a felony?

Ans3 - It is the worst type of insurance fraud and yes, it is a felony.


Q4 - What is the most common type of worker compensation fraud?

Ans4 - Sprain or pain, usually in the back or shoulder, is the injury for which most fraudulent claims are made. 1 in 4 people in California thinks that it is ok to defraud their employers.


Q5 - How long does the Workers' Compensation Fraud investigation take?

Ans5 - It can take any amount of time from days to even years. Some fraudsters are more careful than the rest and they know what they are doing. It also depends on how motivated the PIs are and if lady serendipity is with them.


Workers’ Compensation Fraud is like a plague and it is committing a crime by exaggerating a claim of disability against one’s employer. It is a felony. Workers’ Compensation Fraud investigators are often successful in catching the culprit but for every one person caught, thousand of others slip through the cracks. Klearai Native AI Fraud detection system is built ground up to automate workers comp fraud investigation and reduce the time and costs involved investigating a workers compensation fraud.



Also Read: Best AI Workers Compensation Claims Management Software in 2021


Also Read: 19 ways to reduce workers compensation costs


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