Complaints about workers’ compensation scams surfaced in New York in 2021 when more employees returned to work, even though nearly half were considered “unsubstantiated,” according to a report from government officials.
However, the increase in allegations of fraud correlates with an increase in accused workers seeking legal advice, said a well-known defense lawyer for workers’ skills.
Last week, New York State Inspector General Lucy Lang released the state’s annual report for the 2021 Workers’ Compensation Fraud, which describes claims and fraud investigations last year.
In 2021, WCFIG received 1,118 complaints about fraud, up from 1,019 in 2020, and dismissed 492 cases as unfounded or 44%, compared to 336 the previous year.
Aries Dela Cruz, head of strategic initiatives at the New York State Inspector General’s office in Albany, New York, said there were “countless reasons” for the allegations to be unfounded, but the overriding reason is insufficient evidence to bring a prosecutor or referral. to a prosecutor.
“There may either be insufficient evidence for employees or there may actually be workers on the part of the employer,” said Mr. Dela Cruz. “For an employee, there is either insufficient evidence of external activity or that the employee has not actually received compensation benefits during periods of external activity.”
Todd Spodek of the New York-based Spodek Law Group PC – criminal defense attorney for the so-called Soho Grifter fraudster Anna ‘Delvey’ Sorokin – who represents workers accused of fraud, said his company has seen an increase in the number of clients seeking representation for fraud in the pandemic.
“The pandemic definitely drove up fraudulent claims, and as it became easier to file claims under covid, more people have filed and more people are potentially committing crimes or doing things that were unethical,” Spodek said.
In addition, while New York courts reopened in 2021, limiting or delaying a significant backlog caused by closures during pandemic criminal trials and the presentation of new cases to large juries by district prosecutors across the state, the fraud report said.
Mr Spodek said the rise was likely a result of the pandemic’s economic effects on workers – job losses, delays in unemployment, housing problems – along with covid-19 delays and disruptions.
“There are certainly more cases being investigated,” Spodek said. “Just as there was an increase in fraud cases in the Paycheck Protection Program, so there is an increase in people trying to take advantage of workers’ benefits.”
What becomes of unfounded complaints depends on the evidence of the case, said Dela Cruz. “Some are closed altogether, and some are being referred to other authorities for possible further investigation,” he said.
“Many people filed fraudulent claims and could not provide the documentation to support it,” Spodek said. “And many times people just forget about them. There’s also a significant amount of people who file these things and then stop moving or leaving.”
Among the 1,118 complaints, WCFIG initiated 28 as complete investigations, continued 334 cases as ongoing preliminary investigations and closed 51 for failure to allege breach of prosecution or where WCFIG lacked jurisdiction to investigate, among other things.
Of the 492 unfounded cases, WCFIG referred 213 complaints for further action to the appropriate agency or insurer, including the New York State Insurance Fund, other New York State Workers’ Compensation Boards, or other interested parties.