Employee's WC fraud conviction stands in face of misconduct claims

In California, a person charged with committing workers' compensation fraud does not have a defense to the crime by asserting that his employer was also guilty of wrongdoing.

Case name: Boulware v. Department of Insurance, et al., No. CV 09-4325-R(E) (C.D. Cal. 11/16/09).

Ruling: The U.S. District Court, Central District of California dismissed a former employee's complaint, finding he failed to support his civil rights and federal racketeering claims against his employer and various state officials.

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What it means: In California, a person charged with committing workers' compensation fraud does not have a defense to the crime by asserting that his employer was also guilty of wrongdoing.

Summary: The employee was convicted of two counts of workers' compensation fraud based on his failure to disclose a previous injury to an examining physician. He claimed that the California Department of Insurance had no authority to investigate him for fraud because his employer was an "illegally uninsured employer" at the time of the accident, in violation of California law. He claimed that the department had no basis to investigate him because it knew there was no fraud on a "victim" insurance company. The court rejected his claims. It explained that the law does not permit the employee to commit workers' compensation fraud, even if his employer is uninsured. It further noted that just because an employer may be guilty of violating the law, the wrongdoing is not a defense to the employee's commission of fraud. To the extent the employee based his claims on allegations that state officials lacked authority to investigate him, he failed to assert a legal claim for relief and his claims were dismissed.

The employee also alleged that the state fraud division, the Los Angeles district attorney's workers' compensation fraud division, and public prosecutors were part of a "racketeering scheme" that falsely accused, arrested, prosecuted and convicted him of fraud because they knew there was no victim insurance company involved from the outset. However, the court found that the prisoner failed to properly identify any "predicate acts" of the various state officials as required by the Racketeer Influenced and Corrupt Organizations Act. His RICO claim was dismissed.

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January 14, 2010

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