Ohio business owners owe more than $800K following fraud-related convictions

Three Northeast Ohio men owe the Ohio Bureau of Workers’ Compensation (BWC) more than $800,000 after investigators discovered they were operating their businesses without workers’ compensation coverage.

“These business owners learned the hard way they cannot operate their business without workers’ compensation coverage, and now they owe us hundreds of thousands of dollars,” said BWC Administrator/CEO Stephanie McCloud. “I’m pleased our investigators stopped these employers from continuing to break the law and cheat our system.”

William H. Foster III

William H. Foster III, owner of American Construction Group LTD, pleaded guilty Feb. 11 in a Summit County courtroom to a second-degree misdemeanor of obstructing official business after failing to work with BWC to reinstate his policy. A judge sentenced Foster to credit for time served in jail and to follow the payment agreement he made with the BWC and the Ohio Attorney General’s Office to reinstate his policy. Foster owes BWC more than $360,000 in past premiums and penalties.

Paul “Bob” Collier Jr.

In Stark County, Paul “Bob” Collier Jr. and Miklos Fioretto pleaded guilty on Jan. 17 and Feb. 5, respectively, to a fourth-degree felony charge of workers’ compensation fraud for failing to maintain coverage on their East Sparta, Ohio, business.

Investigators discovered that Fioretto and Collier changed the name of their pallet manufacturing business to avoid paying past premiums and penalties associated with the business.

Both men were sentenced to three years of community service. A condition of probation is to pay BWC restitution of $458,125.

In other news: A Columbus woman was ordered to pay BWC $6,941 in restitution on Tuesday after pleading guilty to a first-degree misdemeanor charge of workers’ compensation fraud.

BWC investigators discovered Jamia Smith, 39, working for a staffing firm while concealing that information from BWC to continue collecting disability benefits. A judge also sentenced Smith to three years of probation in lieu of six months in jail. To report suspected workers’ compensation fraud, call 1-800-644-6292 or visit www.bwc.ohio.gov.

Akron business owner convicted of manslaughter, workers’ comp fraud

Company has history of worker injuries, noncompliance with BWC

The owner of an Akron construction company pleaded guilty to involuntary manslaughter July 24 after one of his workers fell to his death in late 2017.

James D. Coon, the owner of James Coon Construction, also pleaded guilty in a Summit County courtroom to a fourth-degree felony charge of workers’ compensation fraud. Investigators with the Ohio Bureau of Workers’ Compensation (BWC) found Coon lacked BWC coverage when his employee died and that he repeatedly lied about his business to minimize his premiums or avoid paying them altogether.

“This tragic case underscores the critical importance for workplace safety protocols and workers’ compensation insurance,” said BWC Administrator Stephanie McCloud. “Our investigation found Mr. Coon willfully and deliberately disregarded his responsibilities under the law, and now several lives are devastated by it.”

Gerardo “Jerry” Juarez Sr., a 39-year-old married father of five, died Nov. 4, 2017, at the scene of his fall. It was his second day on the job. The federal Occupational Safety and Health Administration notified BWC of the accident four days later.

According to BWC’s special investigations department, Juarez was working on a sloped roof of a 3-story apartment complex without a fall protection device when he slipped and fell 25 feet to his death. Among the investigation’s findings:

  • Two other Coon employees were injured in falls prior to Juarez’s death, also during a time when Coon lacked BWC coverage.
  • Coon told BWC he no longer operated his business. But in March 2018 — five months after Juarez’s death — agents observed six Coon employees at a worksite tearing shingles from a roof. They had no safety equipment.
  • Coon consistently reported to BWC over the years of having no employees. A BWC audit found nearly $286,000 in payroll to employees from July 1, 2009 through July 1, 2018.

Coon owes BWC $303,152 to date for unpaid premiums and claims costs for workers injured during a policy lapse. His conviction for involuntary manslaughter, a third-degree felony, is punishable by a maximum five years in prison and a fine of up to $10,000. Sentencing is set for August 21.

BWC safety services and grants: BWC offers free safety consultations and grant dollars to assist employers with the purchase of equipment that improves workplace safety. For more, visit bwc.ohio.gov and click on the Safety & Training link.

To report suspected workers’ compensation fraud, call 1-800-644-6292 or visit bwc.ohio.gov.

Special investigations department finishes FY2018 with impressive results

By Jim Wernecke, Director, BWC Special Investigations Department

It’s getting harder and harder for the criminally minded to rip off BWC and the State Insurance Fund and get away with it.

That was the message I took to BWC’s board of directors Thursday afternoon when I presented the board with the Special Investigations Department’s annual report for FY2018, which closed June 30. The report details another impressive year of our department’s efforts to deter, detect, investigate and prosecute workers’ compensation fraud.

Here are some highlights in what was our 25th year as a department:

  • We closed 1,622 fraud cases, 448 more than in 2017.
  • We secured 101 convictions of claimants, employers and health care providers who defrauded our agency.
  • For every dollar we spent on our efforts, we saved the state fund nearly five ($4.81), or $1.33 more than last year.
  • We reduced our investigation time per case by 23 days on average, our lowest number on this measure since 2005.
  • All told, we saved the state fund $60.1 million in 2018, a 44 percent jump over 2017’s numbers.

We couldn’t have achieved this success without the 121 dedicated staff members who serve our department with great skill, resourcefulness and determination to bring justice to those who cheat our system. We also owe a great deal of credit to advances in technology and a key operational change we made last year to increase our efficiency and productivity.

Drones and Workplace Safety
The drone program we implemented in 2017 for our safety investigators proved itself a worthy investment in 2018. Our safety investigators relied on the tool at 10 workplace safety violation sites last year, including two that would have been especially difficult and dangerous, if not impossible, to properly investigate without it. The most challenging case involved flying the drone into an elevator shaft. Another involved an old factory site where the factory was being torn down. Thanks to our drones, our safety investigators could remain at a safe distance while navigating the drones to survey the sites and take accident scene pictures.

We have three drone pilots certified with the Federal Aviation Administration and three more waiting in the wings, so to speak. And while they find the drones fun and exciting, their enthusiasm is tempered in knowing that each operation is tied to tragedy and unfortunate events. Their drive is to ensure they gather accurate data and conduct unbiased investigations.

Hotline
In November we rolled out a new method for collecting fraud allegations. Until then, outside callers would report allegations to BWC personnel that staffed our customer contact centers. Now the callers reach our investigators directly, which allows our team to ask follow-up questions and obtain more precise information to jumpstart the investigation. It also reduced or eliminated the wait times for callers, which led to fewer dropped calls. The bottom line is the new hotline system led to a more comprehensive and detailed fraud allegation packet that we could send to our field teams.

Looking ahead
As we commence our 26th year in FY 2019, we remain united in our commitment to protecting the state insurance fund and the Ohio workers and employers it serves. We join our colleagues throughout this agency in delivering the people of this state the world-class workers’ compensation system they deserve.

Cincinnati man who claimed to be permanently and totally disabled worked two jobs

Bruce WilcoxBruce Wilcox of Cincinnati (Hamilton County) was sentenced Feb. 25 in a Franklin County courtroom after pleading guilty to working two jobs while he claimed a workplace injury left him permanently disabled.

BWC’s Special Investigations Department (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.

Wilcox pleaded guilty in Franklin County Common Pleas Court to a fifth-degree felony charge of workers’ compensation fraud. Judge Brown sentenced him to community control for five years of basic supervision and set the conditions that Wilcox 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.