May 21, 2023 • 15 mins
Original Air Date: May 21, 2023
Frank Sztuk of The New York Alliance Against Insurance Fraud says workers comp fraud both by employees and employers costs every single New Yorker more than 100 dollars a year. There is something you can do to stop it.
Frank Sztuk of The New York Alliance Against Insurance Fraud says workers comp fraud both by employees and employers costs every single New Yorker more than 100 dollars a year. There is something you can do to stop it.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome to Sunsteen Sessions on iHeartRadio,Conversations about issues that matter. Here's your
host, three time Gracie Award winner, Shelley Sunstein. I am happy to
welcome Frank Stuck with us. He'sthe senior vice president of Investigative Services at
Delta Group and chair of the PublicOutreach Committee for the New York Alliance Against
(00:23):
Insurance Fraud. And way back,he was a police officer in New Jersey
for ten years. Which department,Frank, Marris Township, New Jersey,
which is near Marristown. Oh No, I know where it is. I
know New Jersey from all my yearsof traveling soccer going everywhere in New Jersey.
(00:44):
Yes, as a soccer mom.Okay. So, the New York
Alliance Against Insurance Fraud is specifically thisyear on a campaign to target workers comp
frauds. So, in a nutshell, Frank, exactly what is workers comp
fraud? All right? Workers compfraud really is in two distinct avenues.
(01:10):
One would be injury fraud claimant fraud. This is people who may be exaggerating
an injury they get at work orstaging and an injury they get at work,
all right, And the way thatwould the way that would happen is
somebody may be legitimately injured on thejob, go to a go to their
(01:34):
doctor or an unscrupulous medical provider whohelps them commit fraud by exaggerating their injuries,
putting them out on disability for alonger period than is required for that
type of injury. So, youknow, you look at it. We
look at it from two different perspectives. So there's there's the worker's side and
(01:57):
it is the employers side. Becauseone of the biggest areas of fraud and
workers compensation coverage is what we calla premium evasion fraud, which is comes
in a number of different forms.We have employers who will misclassify the type
(02:17):
of work that their company does andthe type of work that their employees do,
all right, so thereby looking toget a lower insurance premium rate.
We also have employers who will noteven put their employees on the books of
the company and until such time thatthey may be injured on the job.
(02:39):
Then all of a sudden, thisemployee has only been with the company for
a few days is injured and thenthey provide provide coverage for that injury.
And again the reason for that isto avoid paying you an insurance premium on
those employees. So what we seeis a lot of employers will pay pay
(03:05):
their staff under the table, paymand cash and will not put them on
their books until such time that theyhave an injury frank which is the bigger
problem? Is one a larger problemthan the other, more problem. In
my forty two plus years experience,I see the financial impact of the employer
(03:30):
fraud being being a bigger problem thanthan the claimant injury fraud. But they're
they're both a huge problem, especiallyin the state of New York. Shelling.
Okay, now, how much arewe talking about how this impacts every
single New Yorker? Because the figuresI got were just they just blew me
(03:53):
away. I had no idea froma very basic level. You know,
we look at the course of insurancefraud being upwards of nine hundred plus dollars
a year for every resident in thestate and New York, not just people
who are paying for insurance, butevery resident, every man, woman,
(04:17):
child, grandmother, grandfather, andworkers' comp fraud is a distinct impact on
that number. You know, welook at our research shows us that workers
COMFRAU in the state of New York. Every person in the state is paying
one hundred and two dollars toward thatfraudulent system, So every person in the
(04:42):
State of New York, not justpeople who are insured. And then that
doesn't even take onto account, Shelley, the increased costs on goods and services.
So there's there's higher prices on everythingbecause of the problem of workers compensurre
fraud. What are the penalties foran individual who's found guilty of workers comp
(05:08):
insurance fraud, and then how andwhat happens to a company who has found
guilty There are in the state ofNew York. Insurance fraud is a is
a criminal act under the insurance Codeand under the law obviously the laws in
the State of New York. Soan individual who has caught committee insurance fraud
(05:30):
is subject to arrest, the subjectto being indicted for fraud and being what
we call put into the system.Employers, on the other hand, also
have that have that possibility of beingindicted for insurance fraud and prosecuted by the
State of New York for committing thatact. And employers through their business also
(05:57):
run the risk of losing their licenses. For instance, So you take take
that unscrupulous medical provider for instance thatI talked about a few minutes ago.
If that if that provider is courtcommitting or assisting somebody a committing insurance for
it, they can lose their medicallicense. Attorneys can lose their their law
(06:19):
license. UM, physical therapists canlose their license to work if they're caught
committing insurance in the state of NewYork. Does an individual can an individual
be jailed? And if how long? Absolutely? And the the amount of
(06:40):
time that somebody could potentially serve okay, is really comes down to how big
the fraud was, know what theirinvolvement in the scheme was. Okay,
The reality of it is, UM, do a lot of people go to
jail for worker's comfort? Not really, but people do. And it's usually
(07:04):
when we see those high impact conspiratorialcases where you know the I think if
you if you think back a fewyears, there was a big work comp
fraud scheme on the Long Island Railroadright where a number of employees were right
(07:27):
before retirement, where all of asudden getting injured on the job. They
were using the same doctors and lawyersall right to perpetrate that fraud, and
some of those people did go tojail. Shelley, I am speaking with
Frank Stuck. He is the seniorvice president of Investigative Services at Delta Group
(07:49):
and he's the chair of the publicOutreach committee for the New York Alliance Against
Insurance Fraud and the New York AllianceAgainst Insurance Frauds on a big campaign to
educate us all on workers comp fraud. And we were talking about with Frank
that there are two different types.It's the employees who do this, but
(08:11):
there's also the employers who do this. Now, what's interesting is Frank said,
it's really the employers who do itmore. And yet what we hear
in the media is about the personwho committed fraud and then you see a
picture of them running a marathon orworking out at the gym, Right,
I mean, I don't hear aboutthe companies. Why. That's a good
(08:37):
question, Shelley, and I thinkthat most of the most of the fraud
that we see, and most ofthe fraud that is prosecuted is done is
on the employer side, is onthe high dollar premium evasion side. I
think what part of the problem thatwe have with the insurance fraud in general
(08:58):
is and it's one of the reasonsthat the Alliance is focusing on workers comp
fraud this year is to raise thelevel of importance of insurance fraud as a
criminal act in the State of NewYork. So, you know, we
we realize in our business that fraud, that insurance fraud, in some people's
(09:22):
minds, is not an impact crime, but it truly is because it's one
of the only crimes in the countrythat impacts everybody. Okay, now you
were talking about in the case ofthe li double r with the workers comp
insurance fraud and that also involved pensionfraud. Um, there was a network
(09:48):
that they could figure you know,they knew where to go. So is
there this underground network that this isthe business they're in there? Definitely is
And I think if you look atlook at that case specifically, the way
that it worked is these these workerswho are looking to enhance their their off
(10:13):
say, enhance their future earning potentialby committing fraud, knew who to go
to. They knew who the pointperson was that could direct them to those
people to help them commit that fraud. That's why in the state of New
York if you if you look atthe insurance fraud language in the state of
New York through the you know,the New York Insurance Frauds Bureau, it
(10:37):
says that any misrepresentation constitutes fraud andanybody who aids and the bets somebody in
the commission of a fraudulent act isalso subject to being prosecuted for fraud.
So that's where these these um,these players come in. That's where the
(10:58):
directors come in. They're helping somebodycommit fraud. They can be prosecuted and
convicted of insurance fraud for leading theleading the scheme. You know, every
time you go to a doctor andyou have an injury, there is a
check off there was this injury andon the job injury that thankfully has never
(11:26):
happened to me. What happens ifyou check that the workers comp system is
a different system than your regular umhealthcare system. Okay, so it's it's
a different level of insurance. Sosay, and I've seen that myself when
I've gone to the doctors. UM, if you if you check yes,
(11:48):
then the the insurance coverage goes tothe employer, not to your personal policy.
So you've got healthcare fraud and youhave workers comp workers compensations insurance system,
how can employees be suspect? Howwould they suspect their employer of not
(12:16):
being on the up and up withworkers comp fraud? What are the signs?
What are the signals? What doyou look for? There's a few
distinct things that we're letting people knowof this year through our campaign. First
of all, if you if youwork for an employer who pays offers to
pay you in cash, okay,or maybe says I'll pay your overtime in
(12:39):
cash or pays part of your salaryin cash. If a worker is injured
and they when they go to theiremployer to report it, the employer says,
well, we don't want you tofile a claim, We'll pay for
it directly, right, that maybe an indication that employer doesn't have the
(13:00):
requisite workers coverage for that employee,um, you know, And that that's
the main way that employees can identifywhether or not they're they're working for somebody
who in reality doesn't care about thembecause they haven't done the they haven't done
(13:20):
the right thing and got the rightcoverage for those employees. The other thing
is when an employer an employee iswork is injured on the job. For
instance, if they were if theywork for a manufacturer and their their job
classification is say a packer or aclerical worker, and um, they're they're
(13:43):
told to go out and work onthe on the production floor, all right.
If they're told to work in anarea of the company that they weren't
hired for, that also could bean indication that they are um that their
employer is miss classifying their job toget a lower rate of insurance. Okay,
(14:03):
we only have a minute left,how because what does an employer look
out for? Signals of workers comefront on the part of the employee and
that there's some great red flags inthat area. So we first look.
We look. We advise our ourclients are the employers, to look for
(14:24):
injuries that happen late on a Fridayafternoon or early on a Monday morning.
Look for injuries that are where thereport of the injury is delayed before the
employee says to their boss, hey, I was injured on the job last
week. We look for employers tolet us know that when the employee goes
(14:46):
in to get the injury treated.Now, all of a sudden where they
hurt their back. Well, nowthey're claiming that their knee is hurt or
you know, a part of theirbody is injured that had no relevancy to
the injury that was rep ordered tothe employer. And so that's just a
few ways that employers can look outfor that individual worker who's committing insurance fraud.
(15:09):
I want to thank you, FrankStuck, and if you need more
information, go to New York AllianceAgainst Insurance Fraud, both if you're an
employee or an employer, because wecould have gone on and on about this
something that costs us all in thestate of New York. It's fraud Andy
dot com, that's fraud y dotcom or call us at eight four four
(15:33):
fraud and Y. Thank you Frank, thankshell. You've been listening to Sunzeen
Sessions on iHeartRadio, a production ofNew York's classic rock Q one oh four
point three.
Welcome to Sunsteen Sessions on iHeartRadio,Conversations about issues that matter. Here's your
host, three time Gracie Award winner, Shelley Sunstein. I am happy to
welcome Frank Stuck with us. He'sthe senior vice president of Investigative Services at
Delta Group and chair of the PublicOutreach Committee for the New York Alliance Against
(00:23):
Insurance Fraud. And way back,he was a police officer in New Jersey
for ten years. Which department,Frank, Marris Township, New Jersey,
which is near Marristown. Oh No, I know where it is. I
know New Jersey from all my yearsof traveling soccer going everywhere in New Jersey.
(00:44):
Yes, as a soccer mom.Okay. So, the New York
Alliance Against Insurance Fraud is specifically thisyear on a campaign to target workers comp
frauds. So, in a nutshell, Frank, exactly what is workers comp
fraud? All right? Workers compfraud really is in two distinct avenues.
(01:10):
One would be injury fraud claimant fraud. This is people who may be exaggerating
an injury they get at work orstaging and an injury they get at work,
all right, And the way thatwould the way that would happen is
somebody may be legitimately injured on thejob, go to a go to their
(01:34):
doctor or an unscrupulous medical provider whohelps them commit fraud by exaggerating their injuries,
putting them out on disability for alonger period than is required for that
type of injury. So, youknow, you look at it. We
look at it from two different perspectives. So there's there's the worker's side and
(01:57):
it is the employers side. Becauseone of the biggest areas of fraud and
workers compensation coverage is what we calla premium evasion fraud, which is comes
in a number of different forms.We have employers who will misclassify the type
(02:17):
of work that their company does andthe type of work that their employees do,
all right, so thereby looking toget a lower insurance premium rate.
We also have employers who will noteven put their employees on the books of
the company and until such time thatthey may be injured on the job.
(02:39):
Then all of a sudden, thisemployee has only been with the company for
a few days is injured and thenthey provide provide coverage for that injury.
And again the reason for that isto avoid paying you an insurance premium on
those employees. So what we seeis a lot of employers will pay pay
(03:05):
their staff under the table, paymand cash and will not put them on
their books until such time that theyhave an injury frank which is the bigger
problem? Is one a larger problemthan the other, more problem. In
my forty two plus years experience,I see the financial impact of the employer
(03:30):
fraud being being a bigger problem thanthan the claimant injury fraud. But they're
they're both a huge problem, especiallyin the state of New York. Shelling.
Okay, now, how much arewe talking about how this impacts every
single New Yorker? Because the figuresI got were just they just blew me
(03:53):
away. I had no idea froma very basic level. You know,
we look at the course of insurancefraud being upwards of nine hundred plus dollars
a year for every resident in thestate and New York, not just people
who are paying for insurance, butevery resident, every man, woman,
(04:17):
child, grandmother, grandfather, andworkers' comp fraud is a distinct impact on
that number. You know, welook at our research shows us that workers
COMFRAU in the state of New York. Every person in the state is paying
one hundred and two dollars toward thatfraudulent system, So every person in the
(04:42):
State of New York, not justpeople who are insured. And then that
doesn't even take onto account, Shelley, the increased costs on goods and services.
So there's there's higher prices on everythingbecause of the problem of workers compensurre
fraud. What are the penalties foran individual who's found guilty of workers comp
(05:08):
insurance fraud, and then how andwhat happens to a company who has found
guilty There are in the state ofNew York. Insurance fraud is a is
a criminal act under the insurance Codeand under the law obviously the laws in
the State of New York. Soan individual who has caught committee insurance fraud
(05:30):
is subject to arrest, the subjectto being indicted for fraud and being what
we call put into the system.Employers, on the other hand, also
have that have that possibility of beingindicted for insurance fraud and prosecuted by the
State of New York for committing thatact. And employers through their business also
(05:57):
run the risk of losing their licenses. For instance, So you take take
that unscrupulous medical provider for instance thatI talked about a few minutes ago.
If that if that provider is courtcommitting or assisting somebody a committing insurance for
it, they can lose their medicallicense. Attorneys can lose their their law
(06:19):
license. UM, physical therapists canlose their license to work if they're caught
committing insurance in the state of NewYork. Does an individual can an individual
be jailed? And if how long? Absolutely? And the the amount of
(06:40):
time that somebody could potentially serve okay, is really comes down to how big
the fraud was, know what theirinvolvement in the scheme was. Okay,
The reality of it is, UM, do a lot of people go to
jail for worker's comfort? Not really, but people do. And it's usually
(07:04):
when we see those high impact conspiratorialcases where you know the I think if
you if you think back a fewyears, there was a big work comp
fraud scheme on the Long Island Railroadright where a number of employees were right
(07:27):
before retirement, where all of asudden getting injured on the job. They
were using the same doctors and lawyersall right to perpetrate that fraud, and
some of those people did go tojail. Shelley, I am speaking with
Frank Stuck. He is the seniorvice president of Investigative Services at Delta Group
(07:49):
and he's the chair of the publicOutreach committee for the New York Alliance Against
Insurance Fraud and the New York AllianceAgainst Insurance Frauds on a big campaign to
educate us all on workers comp fraud. And we were talking about with Frank
that there are two different types.It's the employees who do this, but
(08:11):
there's also the employers who do this. Now, what's interesting is Frank said,
it's really the employers who do itmore. And yet what we hear
in the media is about the personwho committed fraud and then you see a
picture of them running a marathon orworking out at the gym, Right,
I mean, I don't hear aboutthe companies. Why. That's a good
(08:37):
question, Shelley, and I thinkthat most of the most of the fraud
that we see, and most ofthe fraud that is prosecuted is done is
on the employer side, is onthe high dollar premium evasion side. I
think what part of the problem thatwe have with the insurance fraud in general
(08:58):
is and it's one of the reasonsthat the Alliance is focusing on workers comp
fraud this year is to raise thelevel of importance of insurance fraud as a
criminal act in the State of NewYork. So, you know, we
we realize in our business that fraud, that insurance fraud, in some people's
(09:22):
minds, is not an impact crime, but it truly is because it's one
of the only crimes in the countrythat impacts everybody. Okay, now you
were talking about in the case ofthe li double r with the workers comp
insurance fraud and that also involved pensionfraud. Um, there was a network
(09:48):
that they could figure you know,they knew where to go. So is
there this underground network that this isthe business they're in there? Definitely is
And I think if you look atlook at that case specifically, the way
that it worked is these these workerswho are looking to enhance their their off
(10:13):
say, enhance their future earning potentialby committing fraud, knew who to go
to. They knew who the pointperson was that could direct them to those
people to help them commit that fraud. That's why in the state of New
York if you if you look atthe insurance fraud language in the state of
New York through the you know,the New York Insurance Frauds Bureau, it
(10:37):
says that any misrepresentation constitutes fraud andanybody who aids and the bets somebody in
the commission of a fraudulent act isalso subject to being prosecuted for fraud.
So that's where these these um,these players come in. That's where the
(10:58):
directors come in. They're helping somebodycommit fraud. They can be prosecuted and
convicted of insurance fraud for leading theleading the scheme. You know, every
time you go to a doctor andyou have an injury, there is a
check off there was this injury andon the job injury that thankfully has never
(11:26):
happened to me. What happens ifyou check that the workers comp system is
a different system than your regular umhealthcare system. Okay, so it's it's
a different level of insurance. Sosay, and I've seen that myself when
I've gone to the doctors. UM, if you if you check yes,
(11:48):
then the the insurance coverage goes tothe employer, not to your personal policy.
So you've got healthcare fraud and youhave workers comp workers compensations insurance system,
how can employees be suspect? Howwould they suspect their employer of not
(12:16):
being on the up and up withworkers comp fraud? What are the signs?
What are the signals? What doyou look for? There's a few
distinct things that we're letting people knowof this year through our campaign. First
of all, if you if youwork for an employer who pays offers to
pay you in cash, okay,or maybe says I'll pay your overtime in
(12:39):
cash or pays part of your salaryin cash. If a worker is injured
and they when they go to theiremployer to report it, the employer says,
well, we don't want you tofile a claim, We'll pay for
it directly, right, that maybe an indication that employer doesn't have the
(13:00):
requisite workers coverage for that employee,um, you know, And that that's
the main way that employees can identifywhether or not they're they're working for somebody
who in reality doesn't care about thembecause they haven't done the they haven't done
(13:20):
the right thing and got the rightcoverage for those employees. The other thing
is when an employer an employee iswork is injured on the job. For
instance, if they were if theywork for a manufacturer and their their job
classification is say a packer or aclerical worker, and um, they're they're
(13:43):
told to go out and work onthe on the production floor, all right.
If they're told to work in anarea of the company that they weren't
hired for, that also could bean indication that they are um that their
employer is miss classifying their job toget a lower rate of insurance. Okay,
(14:03):
we only have a minute left,how because what does an employer look
out for? Signals of workers comefront on the part of the employee and
that there's some great red flags inthat area. So we first look.
We look. We advise our ourclients are the employers, to look for
(14:24):
injuries that happen late on a Fridayafternoon or early on a Monday morning.
Look for injuries that are where thereport of the injury is delayed before the
employee says to their boss, hey, I was injured on the job last
week. We look for employers tolet us know that when the employee goes
(14:46):
in to get the injury treated.Now, all of a sudden where they
hurt their back. Well, nowthey're claiming that their knee is hurt or
you know, a part of theirbody is injured that had no relevancy to
the injury that was rep ordered tothe employer. And so that's just a
few ways that employers can look outfor that individual worker who's committing insurance fraud.
(15:09):
I want to thank you, FrankStuck, and if you need more
information, go to New York AllianceAgainst Insurance Fraud, both if you're an
employee or an employer, because wecould have gone on and on about this
something that costs us all in thestate of New York. It's fraud Andy
dot com, that's fraud y dotcom or call us at eight four four
(15:33):
fraud and Y. Thank you Frank, thankshell. You've been listening to Sunzeen
Sessions on iHeartRadio, a production ofNew York's classic rock Q one oh four
point three.
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