Did Ice Cream Shop Business Melt Drugstore Employee’s Claim that he couldn’t Work?

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In New York, employees who stretch the truth or outright lie about the extent of their injuries can lose their workers’ compensation benefits. A case involving a former Rite Aid employee who said he was psychologically injured at work shines a light on some of the places employers should look when they suspect fraud.

The employee filed a workers’ compensation claim in 2018 contending he suffered a psychological injury due to harassment and discrimination at work. He told a psychiatrist that his symptoms were that he was socially withdrawn and reluctant to leave home. He said, as a result, he never went back to working in any capacity. His claim was successful, and he began receiving benefits. 

The employer, after checking the claimant’s social media postings and tax returns, sought to have his benefits discontinued. The social media account showed him going on lots of trips, including to Pakistan and Florida. It showed him involved in various activities with friends and family outside of the home, including at famous theme parks.

His tax returns for the period when he was receiving benefits showed he was co-owner with his wife of an ice cream franchise and other businesses with her and his brother. He said his wife managed that business and he wasn’t really involved. The 2018 return said he "materially participate[d]" in the operation of a business and he posted about it on social media. 

A workers’ compensation law judge granted the employer’s request to stop the flow of benefits to the claimant. The workers’ compensation board affirmed that decision and the claimant appealed. 

Under New York law, a claimant who knowingly makes a false statement or misrepresentation to obtain workers' compensation benefits or to influence his claim will be disqualified from receiving any compensation directly attributable to the false statement or misrepresentation

Could the employer stop paying the claimant’s benefits?

A. No. The employer didn’t have any surveillance video of him working.

B. Yes. His tax returns and social media postings supported the board’s decision.

If you selected B, you agreed with the court in Qureshi v. Rite Aide Corp., No. CV-23-2455 (N.Y. App. Div. 11/13/25), which found that the claimant’s assertions that he was not working and confined to his home strained credulity.

For the full text of this case, head to Simply Research.

Although the claimant testified that he had not returned to work, his tax returns indicated otherwise. In fact, they showed he was a co-owner in multiple businesses with his wife, including the ice cream franchise, as well as a co-owner in a business with his brother. To begin with, it was too hard to believe that he didn’t participate in or receive income from the ice cream business given that he was a signatory on the business account and promoted the business on social media.

The court also pointed out that the claimant never mentioned his business endeavors nor his extensive travel when he met with his psychiatrist. It agreed that the claimant's failure to disclose those activities was a material misrepresentation designed to secure workers' compensation benefits. The WLCJ and board were thus authorized to stop those benefits.

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