Capacity to work, not actual earnings, bolster fraud conviction for bar owner

A workers' compensation recipient's false representations that he could not work or his failure to disclose that he was capable of working are sufficient to support a fraud conviction under Massachusetts law.

Case name: Commonwealth v. Sarantos, No. 08-P-1440 (Mass. Ct. App. 05/18/10).

Ruling: The Massachusetts Appeals Court upheld the conviction of a Department of Correction lieutenant for workers' compensation fraud.

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What it means: A workers' compensation recipient's ability to perform a number of activities in a bar that he owned demonstrates that he is capable of working, regardless of whether he collected wages or other earnings from his activities. Therefore, his false representations that he could not work or his failure to disclose that he was capable of working are sufficient to support a fraud conviction under Massachusetts law.

Summary: A Department of Correction lieutenant received temporary total disability benefits after injuring his back trying to lift an inmate. After it was discovered that he was working at a bar while receiving benefits, he was convicted of workers' compensation fraud, and his benefits were terminated. In appealing his conviction, the lieutenant argued that the Commonwealth failed to establish that he knowingly made a false statement or failed to disclose information that would affect the payment of his benefits. The Appeals Court upheld the conviction.

The lieutenant testified that he owned the bar and did not derive any income from his activities there because the money he received was "simply a return on investment." The Commonwealth presented evidence that he was an active participant in the day-to-day workings of the bar, served drinks and took orders, broke up fights, cleaned, and shared managerial duties with another employee.

The court noted that on the back of the disability checks the lieutenant received, there was an acknowledgement, which stated in part: "I also certify that during said claim compensable period, I was not able to work and did not work in self-employment or work with any other employer." It concluded that the lieutenant's activities at the bar were sufficient for the jury to find that he falsely stated that he was not capable of working, or failed to disclose that he was in fact working, because he knew that such disclosure would adversely affect his workers' compensation benefits.

Read more at the WorkersComp Forum homepage.

August 16, 2010

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