June 20, 2006

Unholy Matrimony: Husband and Wife Defraud the Comp System

Rosamond, California is a sleepy town in the Mojave Desert, with a population around 15,000. It's hot, flat and quiet, except perhaps for the sonic booms originating at Edwards Air Force Base, which lies 23 miles to the east. But in a scenario right out of pulp fiction, Rosamond is the scene for an elaborate case of workers comp fraud.

Until 1995 Rosemary Bunch was a payroll clerk for the Methodist Church, when she was disabled by carpal tunnel syndrome. Her husband, Robert, suffered an elbow injury at a cement plant in 1999. By 2005, both were still collecting comp. Bob was on temporary total, while Rosemary was on permanent total disability with fibromyalgia, which caused chronic pain that put her on crutches and in a wheelchair. In adition to her indemnity and medical benefits, Rosemary was awarded a full time housekeeper (40 hours a week) to handle chores, do the laundry and cleaning. And to get around town, she had the (comp-paid) services of a limo driver.

Bob and Rosemary collected over $1 million in benefits until someone apparently dropped a dime on them. Video surveillance revealed that Rosemary walked about comfortably whenever she wanted to and only used her crutches and wheelchair when dealing with the comp system. Bob took advantage of his time off on disability to climb ladders, work on the roof of a tall metal storage building and maintain their property.

When they were indicted last year, they faced up to 8 years in prison and fines of $500K apiece. They copped a plea and will be sentenced to just 90 days, along with some hefty fines.

Opportunity Knocks
This was essentially a crime of opportunity. We can safely assume that in the beginning both Rosemary and Bob had legitimate injuries. But at some point they decided that make-believe disability was a lot easier than working for a living. Who wouldn't want a housekeeper and chauffeur to manage the annoying little details of daily existence?

I wonder whether their employers stayed in touch with them, especially in the early days and weeks of their physical problems. I wonder if the employers made any attempt at getting Rosemary and Bob back to work. (I also wonder if the Methodist Church, knowing what they know now, bothered to audit the payroll once managed by Rosemary.) Supported by workers comp, the Bunches settled into a comfortable routine, out there in the desert. If you don't mind the heat, it's not a bad place to live. And unlike the big cities on the coast, there isn't much crime. At least, crime that you can readily see.



This situation happens with frightening regularity. And yes, employers DO try to get their insurance companies to deny claims or convict on fraudulent claims, but with little or no success. If the owner gets the employee on video tape doing something like what is described here, the insurance company claims bias, and throws out the evidence. If the employee has an attorney, the insurance company backs off from pursuing anything because of the cost. The judges tend to side with the poor victimized employee as well. What's the point of fighting when the system is against the employer?

When insurers do investigate suspicious worker comp claims, their investigations usually take place at the beginning of the case. These folks might have figured out the low chance anyone would check up on them long after the case was settled or decided. At least this instancemight deter the fraud of opportunity


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This page contains a single entry by Jon Coppelman published on June 20, 2006 11:36 AM.

Health Wonk Review #9 was the previous entry in this blog.

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