Columbus – Ohio Bureau of Workers’ Compensation (BWC) Administrator/CEO Steve Buehrer announced today that 17 individuals were convicted of, or pleaded guilty to, charges related to defrauding Ohio’s workers’ compensation system in February 2016. These court actions are the result of investigations conducted by BWC’s Special Investigations Department (SID).
“The outstanding work of our investigators resulted in an impressive number of cases coming to a close in February,” said Buehrer. “From one medical provider who fraudulently billed BWC to several employers who didn’t pay their premiums, and claimants who continued working while on workers’ comp, we see examples of the many types of fraud our investigators must chase each day.”
The following are a sampling of cases that resulted in guilty pleas or convictions during February:
Mark Scanlon, DC (Cincinnati, Hamilton County) pleaded guilty to four counts of workers’ compensation fraud and one count of theft, all first-degree misdemeanors, in the Franklin County Court of Common Pleas on Feb. 29 for billing for services not rendered. Scanlon was a chiropractor and owner of Progressive Rehab Center in Butler County. The allegation involved Scanlon’s fraudulent billing practices including false office notes for dates of service in which patients did not show up or services were not provided. This included creating fee slips with false information for the purpose of billing the managed care organization contracting with BWC. His conduct allowed him to receive reimbursement for services he did not perform or for services that did not occur. SID’s health care provider team worked with the Ohio Department of Insurance in investigating Scanlon. Scanlon was ordered to pay $40,000 in restitution, which he paid to the Clerk of Courts prior to his plea, and to voluntary de-certify himself as a BWC provider.
Robert Daniels (Pickerington, Fairfield County) pleaded guilty to one count failure to comply with the law, a second-degree misdemeanor, on Feb. 11 in the Franklin County Court of Common Pleas for operating his business without workers’ compensation insurance coverage. SID opened an investigation into Daniels and his business, Ohio Sound, after receiving a referral from BWC’s Collections Department, which received three dishonored checks over a six month period for a policy that had been lapsed for several years. Daniels also underreported payroll during two payroll periods and failed to report the payroll for a third payroll period. He was sentenced to community control for two years and was also ordered to perform 100 hours of community service within 90 days. He will serve 90 days in jail if he violates any terms of his community control.
Norman Beight, dba New Waterford Enterprises, Inc. (New Waterford, Columbiana County) appeared in the Columbiana County Court of Common Pleas on Feb. 12 for operating his business with lapsed coverage. SID received a referral from BWC’s Employer Compliance Department (ECD) indicating Norman D. Beight (Denny) and Judith A. Beight (Judy), owners of New Waterford Enterprises Inc., dba Vittle Village, were operating a business without the required workers’ compensation insurance coverage. The ECD attempted several times to get the Beights into compliance prior to referring the case for investigation. During interviews, they both stated they would work toward becoming compliant but neither complied with agents’ request to submit payroll reports or payroll information and enter into a reinstatement payment plan. Denny Beight was convicted of one misdemeanor count of workers’ compensation fraud on Feb. 12, with a dismissal of charges against Judith Beight as part of a plea deal after the couple became compliant and had their policy reinstated. Denny Beight was placed on probation and ordered to remain current on his BWC premiums. The court will review the matter on August 19, 2016 with intention of releasing him from probation if he is still current.
Jeffrey Kobosky, dba Elegant Landscape (Stow, Summit County) pleaded guilty to a second-degree misdemeanor count of workers’ compensation fraud on Feb. 22 in the Summit County Court of Common Pleas for operating his business with lapsed coverage. SID opened an investigation after receiving a referral from an anonymous source regarding coverage status for Kobosky/Elegant Landscape. Kobosky had submitted a bid for a job but was told he must have BWC coverage. After advising that he was working under another company and wouldn’t need to provide a certificate for his company, Kobosky was informed he would have to resubmit his bid on the new company’s letterhead and provide its BWC policy number for verification. Kobosky filed for a new policy on BWC’s website under his name to avoid the debt he had compiled under his company’s name. Agents interviewed Kobosky regarding the lapsed policy and the additional application he completed under his name. Kobosky explained to agents his accountant told him he could complete another application under his name to continue to work. The accountant explained in an interview that he never told Kobosky to apply for another policy and actually advised against it. Kobosky paid restitution in full in the amount of $5,724.48.
Douglas Fay and Laurel Seiner, dba Fay Crushing and Stone LLC (Lima, Allen County), entered into a diversion program on Feb. 11 after pleading guilty to charges related to operating their business without workers’ compensation insurance coverage. BWC’s Employer Fraud Team (EFT) received information from the BWC Collections department advising that two premium payments for Douglas Fay’s business; Fay Crushing and Stone LLC, had been returned for non-sufficient funds, resulting in the BWC coverage policy lapsing. Fay had previously been investigated by the EFT for non-compliance with his BWC coverage. Fay was interviewed by agents and admitted he knew the payments were no good, and signed a bad check letter of acknowledgment. Approximately two weeks later, EFT found Laurel Seiner had submitted a BWC application for coverage pertaining to a stone crushing business in which she listed herself as the sole owner. Agents interviewed Seiner and learned she was the secretary and bookkeeper for several of Fay’s businesses, including Fay Crushing & Stone LLC. Seiner listed there were no other policies associated with her business. Agents interviewed seiner and she stated Fay was now her employee. When questioned, Seiner initially denied conspiring with Fay to open a new policy in order to get a valid certificate. Seiner admitted Fay approached her and asked her to open a policy in her name because his policy was not in good standing and he needed a valid BWC certificate. Seiner pleaded guilty to one count of tampering with records, a third-degree felony. Seiner was sentenced to three years post release control, and ordered to pay $8599.72 in restitution. Fay pleaded guilty to one count of tampering with records, a third-degree felony, one count of workers’ compensation fraud, a fifth-degree felony; and one count of passing bad checks, a fifth-degree felony. Fay was sentenced to five years post release control, and ordered to pay $14,448.92 in restitution.
Jackie Dalton (Dalton, Wayne County) pleaded guilty on Feb. 26 to one count of workers’ compensation fraud, a first-degree misdemeanor, for working while receiving benefits. SID’s Intelligence Unit identified Dalton as working while receiving BWC disability benefits through a cross match with the Ohio Department of Job and Family Services. The investigation found that Dalton had been employed by five businesses while receiving temporary total disability benefits. Agents obtained payroll and employment documentation for Dalton and he admitted in an interview he had worked for these businesses. Dalton was sentenced to 180 days in jail, suspended for three years of community control.
Bruce Wilcox (Cincinnati, Hamilton County) pleaded guilty on Feb. 25 in the Franklin County Court of Common Pleas to a fifth-degree felony charge of workers’ compensation fraud for working while receiving benefits. SID identified a potential conflict after the Ohio Department of Jobs and Family Services reported Wilcox was earning wages while he was collecting permanent total disability. The investigation revealed that Wilcox was working as a consultant for Bavarian Trucking Company and as a Kentucky sales representative for AZO Services Inc. Wilcox worked for a period of five years while collecting the benefits from BWC. He was sentenced to community control for five years of basic supervision on conditions that he obtain/maintain employment and have no new convictions. Wilcox was also ordered to pay $97,203.62 in restitution to BWC. He will serve seven months at Ohio Department of Rehabilitation and Correction if violates the terms of his community control. Wilcox made an initial $25,000 payment towards restitution to the Franklin Clerk of Court’s office after his sentencing.
David Wallace (Columbus, Franklin County) pleaded no contest and was found guilty of a first-degree misdemeanor count of workers’ compensation fraud in the Franklin County Court of Common Pleas on Feb. 23 for working while receiving benefits. SID initiated an investigation after receiving an allegation that Wallace was running a pest control business while receiving disability benefits. The investigation found evidence proving Wallace was the owner/operator of Discount Pest Control, and was actively working as the sole employee while intentionally concealing his activities from BWC in order to continue receiving benefits. Wallace was ordered to pay $10,000 in restitution and was sentenced to 180 days in jail, suspended for 60 months of Community Control.
David Milcinovic (Cleveland, Cuyahoga County) pleaded guilty to a first-degree misdemeanor count of workers’ compensation fraud on Feb. 9 in the Franklin County Municipal Court for working while receiving benefits. SID opened an investigation into Milcinovic after a cross-match with Ohio Department of Job and Family Services indicated the Polish National Alliance reported wages for him during a period of time he was receiving workers’ compensation benefits. The investigation confirmed Milcinovic continued employment as the Vice President of Union of Poles and Board Member of the Polish National Association while he was receiving temporary total disability benefits for a workplace injury. Milcinovic had already prepaid the entire restitution in the amount of $42,911.73 to the Bureau of Workers’ Compensation. He was ordered to pay a fine of $250, plus court costs.
To report suspected workers’ compensation fraud, call 1-800-644-6292 or visit bwc.ohio.gov.
Check out our latest cases at ohiobwcfraud.wordpress.com and view BWC’s workers’ comp fraud awareness video on YouTube.