OH BWC Investigations Result In Six Workers' Comp Fraud Convictions In July

Columbus, OH (WorkersCompensation.com) - Ohio Bureau of Workers' Compensation (BWC) Administrator/CEO Steve Buehrer today announced six individuals were convicted of, or pleaded guilty to, charges related to defrauding Ohio's workers' compensation system in July. The court actions are the result of investigations conducted by BWC's special investigations department (SID). The department works to deter, detect, investigate and prosecute workers' compensation fraud.

“Our pursuit of fraud reflects our commitment to ensuring employer premium dollars are being protected, and we are providing care to injured workers so they can return to work,” said Buehrer. “We will continue to highlight our fraud efforts at every opportunity to promote awareness and deterrence.”

Following is a sampling of the cases that resulted in a guilty plea or conviction during July.

Sarah Barajas, dba, Bane Specialty Services (Dayton, Montgomery County) entered a diversion program after investigators confirmed she falsified her application for workers' compensation insurance coverage. SID's Employer Fraud Team received an anonymous allegation that Bane Specialty Services/David Bane, a temporary employment agency, had been under-reporting payroll premiums. The investigation found Bane Specialty Services canceled its policy effective January 2011, indicating the business had ceased operation. On the same date, David Bane filed his final payroll report indicating he owed BWC premiums of $116,677.12. Bane did not make any payments toward the outstanding premiums. The investigation further found that Bane's daughter, Sarah Barajas, opened a new policy in November 2010 for Bane and Associates, also a temporary employment agency. The application contained no information on the previous business. The investigation found that not only the location, employees, and services offered were the same for both businesses, but the clients were also the same. Agents interviewed a few clients who confirmed that nothing other than the business name had changed. The Montgomery County grand jury indicted Barajas in March for tampering with records since she was the person who submitted the new application excluding the information of the existing policy. Barajas was allowed to enter into a diversion program for first time offenders on July 9. Diversion is to run 12 months. The outstanding balance due to the BWC was paid in full.

Patricia A. Rohman (Parma, Cuyahoga County) was sentenced July 25 after pleading guilty to one misdemeanor count of workers' compensation fraud for working while receiving benefits. The investigation began when an allegation indicated Rohman was delivering Cleveland Plain Dealer newspapers while receiving disability benefits from BWC. Investigators obtained employment records that confirmed she did work for the paper and her employment was inconsistent with her entitlement to benefits. Rohman withdrew her original not guilty plea and entered a plea of guilty. She was sentenced to 180 days incarceration, suspended, and ordered to pay restitution and investigative costs in the amount of $9,359.15.

Michelle Scaggs and Frederick Diebert, dba Triple Star Roofing, (Northwood, Wood County) were found guilty July 15 of felony counts of workers' compensation fraud for under reporting premiums in order to avoid paying workers' comp insurance premiums. SID's Employer Fraud Team received an anonymous tip that Triple Star Roofing was operating with employees, but reporting to BWC the business had no employees or payroll. Agents interviewed Triple Star Roofing workers who said they felt they were employees even though Triple Star classified them as subcontractors and issued them 1099 tax forms. Bank records were analyzed, and the EFT found that checks were issued to the same individuals on a weekly basis with many of them indicating “payroll” in the memo section. In addition, the BWC received and allowed two claims filed by injured workers of the company; those claims were not appealed by Diebert or Scaggs. Although Scaggs refused to cooperate with an audit for more than two and a half years, BWC did eventually conduct an audit that showed Triple Star Roofing failed to report payroll to the BWC from 2004 to 2008. Diebert and Scaggs face possible prison terms of one to five years and fines of up to $10,000 when they are sentenced Sept. 13. Additional charges are pending for the 2009 to 2012 time periods.

Cecil Ball (New Philadelphia, Tuscarawas County) pleaded guilty to one felony count of theft for working while receiving benefits. SID's Intelligence Unit performed a cross match with the Ohio Department of Jobs and Family Services and identified Ball as possibly working while receiving temporary total disability benefits. The investigation found that Ball was working as a truck driver for KTS Transportation between July 2011 and January 2012. Agents interviewed Ball and he acknowledged that he drove a truck for KTS Transportation and was paid wages while receiving workers' compensation. Sentencing is scheduled for Sept. 18.

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