Two Claims Add Up To Big Potential Fraud Savings

New York, NY (CompNewsNetwork) - Two claimants who allegedly returned to work while collecting workers' compensation benefits have been arrested on fraud charges in separate investigations initiated by the New York State Insurance Fund involving a potential combined future savings of nearly $600,000.

Utica Police arrested Frederick Heinig, 42, of Frankfort, NY, Herkimer County, as part of a warrant sweep on June 23, on felony charges of insurance fraud, perjury, offering a false instrument for filing and fraudulent practices.

Investigators said surveillance allegedly revealed Mr. Heinig working as a carpenter during the same time period that he collected wage replacement benefits for an injury he said he sustained as a carpenter in 1999.

Mr. Heinig was held without bail at the time of his arraignment. NYSIF investigators said he allegedly collected $10,200 in benefits he was not entitled to by returning signed statements to NYSIF that he had not returned to work since the injury. He allegedly also denied any employment in sworn testimony before the Workers' Compensation Board.

Mr. Heinig, who had been classified with a "temporary total" disability, could have received up to $60,411 over the life of his claim, which is the amount investigators estimated as the potential future savings in his case.

In a separate case, Rochester State Police arrested Steven Graham, 25, of Greece, NY, Monroe County, on June 18, charging him with insurance fraud, offering a false instrument for filing, grand larceny and violating the Workers' Compensation Law – all felonies.

Investigators said Mr. Graham received workers' compensation benefits for an abdomen injury he claimed in 2006 while working for a Rochester based company. Mr. Graham allegedly received $4,673 in benefits he was not entitled to by returning to work for another Rochester company while returning signed statements to NYSIF that he had not returned to any form of work.

As a result of Mr. Graham's arrests, NYSIF estimated the potential future savings that he could have received over the life of his claim at $525,743.

"When you realize the amount of potential fraud at stake in cases involving only two individuals, you come to understand the serious nature of these economic crimes and their impact on our economy," NYSIF Executive Director James J. Wrynn said. "When you consider that this situation can become more prevalent in a tight economy, you realize how important it is to continue the crackdown on workers' compensation fraud of all types. These results come from cooperation among various state agencies, the law enforcement community and the public working together to fight fraud in New York State."

The investigations were conducted by NYSIF Division of Confidential Investigations, the New York State Insurance Department Frauds Bureau and the New York State Workers' Compensation Board Fraud Inspector General's Office.

Approximately 185,000 employers have workers' compensation insurance policies with NYSIF, making up about 36% of the New York market.

Criminal complaints and indictments are accusations only. Defendants are presumed innocent until proven guilty.

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