Keefe, Campbell & Associates, LLC

Comment: Smart cards, particularly Smart cards that use biometric identification can be a cost-effective and easily implemented solution to the WC fraud problem of charlatans billing for medical care that wasn’t provided. Smart cards are also being used in the rapidly developing arena of identity management. Identity management’s goal is to universally and uniquely identify an individual. It becomes most important when one is identifying an individual within a system as a means to control their access to resources or establishing their rights or limitations within the system. Such is the case with employers, injured workers and medical providers in the WC system.

The incidence of people stealing someone’s identity to access either public or private health coverage is growing across the country. Apart from the financial cost to the system, once someone has obtained services using someone else’s identity, future medical care can be compromised. If the thief had a medical condition, such as diabetes, which was identified during care for an accidental injury, the actual person’s records would forever indicate that diagnosis of diabetes. This may deleteriously affect future care, leading to a potential disaster for an innocent worker who wouldn’t know of the diagnosis. What if the test results or physical findings are those of someone else, but doctors rush to rely on them when you have a medical emergency?

Given the increasing prevalence of identity theft in the medical area, what can Americans do to protect their information? Well, the most obvious ways to protect ourselves would be to take better care of insurance cards and shred/destroy all medical data before disposing of health-related records. We can also check credit reports frequently to ensure that no collections activity has been taken against us by medical clinics, etc. Please remember many injured workers hire lawyers when they are the subject of collection actions, leading to unnecessary WC litigation.

Beyond these obvious courses of action, however, it is a bit unclear what can be done to stop medical identity theft, since most of us are not even privy to our health records, which are often scattered all over a number of healthcare facilities. Given the fact that many of these records are not even stored in a centralized database to date, it seems highly unlikely that we are going to be able to start monitoring our health records in the near future. Privacy experts need to start grappling with these issues now before they can become a more significant problem down the road.

Current efforts to combat this medical identity theft are limited. Oftentimes, medical providers ask for a photo-id to further verify identity. However, these methods are unquestionably inadequate. A biometric identity card ensures the person presenting for services is who they say they are. It also better guarantees the sanctity of the related medical chart.

In the WC environment, employers and insurers often use a fairly consistent panel of medical providers. As such, a biometric identity system can be very effective in ensuring only authorized persons seek and receive care. Similarly, positive identity authentication makes it more difficult for providers to claim services were rendered when they were not.

The SHAPE Card® from Secure Services Corporation provides biometric identity authentication that is affordable and easily implemented. This is especially true in situations where a “panel” of providers is typically used. Added investigation would then be required only for new or non-participating medical providers.

This article was written, in part, by Pamela D. Mitroff, MBA, the Director of Public Relations and Communications for Secure Services Corporation (SSC) in Downers Grove, IL. SSC is a leader in identity management solutions, including a line of healthcare technology solutions built around their SHAPE™ environment. Their product line includes the SHAPE Card™, identity management through a biometric match-on-card, providing secure identification and authentication as well as the recently launched direct-to-consumer personal health record. More information is available at www.secureservicescorp.com. You may contact Ms. Mitrolff via email to pmitroff@secureservicescorp.com.

Editor’s comment: While looking up other things, we found this stunning new twist on workers’ compensation fraud that our readers should be aware of. We are not sure what to make of it or how to best prevent it.

The Los Angeles Times recently reported some California employers, including Walt Disney Co., were taking a new approach to fighting work comp medical billing fraud. Turns out they started to receive medical billing and were paying it to later learn their injured workers had never been inside the phony clinics of the scammer. In response, the insurance carriers/TPAs for these organizations plan to send notices to injured workers to check if they in fact received medial services that were being billed for.

The fraud is being perpetrated by con artists that obtain state reporting data on injured workers and then set up fake medical labs or clinics to then bill insurers/TPAs for treatment that never occurred. The Times reports fraudulent medical billing scams cost hundreds of millions of dollars in California.

The Los Angeles Times story focuses on how insurers/TPAs killed legislation that would have required them to send notices to injured employees to check if they received treatment billed for. Insurers say the effort would cost too much and better ways exist to fight the fraud. Such notices are standard practice in health insurance but generally are not used for workers’ compensation insurance. The insurance companies opposed the proposal because they said sending notices would be overly expensive. The American Insurance Association did not offer an estimate for the cost of the mailings.

Regardless of the cost, Disney reportedly will mail notices next year to 20,000 employees when work comp medical bills get paid. Companies such as Disney have been at the forefront of successfully reducing work comp costs for years.

We ask your thoughts. Obviously, assigning a wily nurse case manager may create a check on such practices—all you would have to do is cross-check all medical billing against the NCM’s reports. If the NCM isn’t aware of and otherwise advising the adjuster of such care, the billing should be very carefully scrutinized. We urge the top nurse case management companies to let their clients know of this further benefit to using a nurse case manager on major claims.

Editor’s comment: We are chagrined to see the Illinois Workers’ Compensation Commission is now touting the fact the Illinois Department of Insurance has gotten a conviction of a workers’ compensation insurance broker. They actually have reported his name and crimes in detail on their website. There is a link to his sentence.

In stark contrast, the Commission still adamantly refuses to publish the names, crimes or sentences of any misguided claimants. Their website says:

To date, the Illinois Department of Insurance Fraud Unit has referred cases that led to seven convictions of claimants, and now one conviction against an insurance agent. New indictments continue to come in. Congratulations to the IDOI.

Congratulations, indeed!!! The “fraud-busters” have been in business for four years. The wise-guys who run the Commission don’t mind attacking Illinois business. They feel publishing the names of miscreants who abuse the workers’ compensation system in this state is bad for new business.

Further, seven busts in four years is, in our minds, hilarious. The cost to Illinois business has to be several million dollars with no indication any restitution has been paid. The “dirty secret” of WC fraud in this state is the unquestioned truth the vast majority of Illinois states’ attorneys won’t consider charges once the Illinois Department of Insurance refers a claim for prosecution. Such matters are simply dropped. We hope the next administration brings workers’ compensation fraud reform to the table.

We appreciate your thoughts and comments.

Editor’s comment: We are again saddened to hear former Illinois Governor Jim Edgar, who is now lecturing at Eastern Illinois University refer to ousted Gov. Rod Blagojevich as the worst governor he’s ever seen and indicate Blagojevich had “no sense of right or wrong.” What is truly amazing about the failed political career of Milorad Blagojevich is he was both a workers’ compensation defense lawyer for the City of Chicago Corporation Counsel’s office and a Cook County assistant state’s attorney. He fought difficult claimants, put people in jail and made deals with witnesses to testify about other bad guys. You have to think he would occasionally talk to folks in prison and see how warm the conditions were there.

Well, most of our readers will note the disgust and trepidation we have suffered dealing with his former administration, the leaders of whom are all going to soon be making agreements to testify against each other. As political observers, we note Blagojevich appears to be dug in and willing to fight and fight, like George Ryan did. Everyone in Illinois politics has to be looking at the horizon and expecting the spring primaries for the 2010 gubernatorial election to start winding up and gaining traction throughout this fall. One has to wonder how much the tawdry details and back door scamming will be played out in the press. History predicts it will be similarly fashioned to how we saw former Governor George Ryan exposed and fall to his eventual conviction. One has to wonder if this will have the same impact on Illinois voters who basically turned away from just about all Republican state candidates in 2002 and 2006. Will the pendulum swing back in the same way?

The most painful thing we saw under the six or so years of the former administration was a total upheaval in the area of workers’ compensation law and practice. What the former Gov did to get past his opponents in the 2002 primary was make a “deal with the devil”—he locked in with the major legal players in the hyper-aggressive Metro East section of Illinois (the area just north of St. Louis) and in the “pay to play” mode of his form of “government;” in exchange for their campaign monies, he gave the southern Illinois Plaintiff bar complete control of the Commission. That control is still in place as we publish this Update.

What we got was

1. A new Chairperson;
2. An unnecessary name change from “Industrial Commission” to “Workers’ Compensation Commission;”
3. A new method of funding that started a new and unprecedented $20 million levy on Illinois business;
4. Expensive additional levies on Illinois business to fund lots of arcane funds that no one funded for year;
5. A tripling of the size of the place with new offices and staff and lots of new hearing officers (many of whom were former Plaintiff/Petitioner lawyers) while claims were actually decreasing;

We also note while our plucky Chairman was busy making sure businesses would pay new and outrageous fees and make huge WC claim payments on his watch, he failed to meet even the most rudimentary internal controls for efficiency and waste avoidance. In fact, while he had no problem calling Arbitrators at home to threaten supposed civil servants with immediate termination for his view of their courtroom practices, he repeatedly failed to do things he promised state auditors he would in 2003 and 2005. Please take a look on the web at:

http://www.auditor.illinois.gov/Audit-Reports/Compliance-Agency-List/IWCC/FY08-IWCC-Fin-Comp-digest.htm.

On top of that, we saw Illinois labor and business agree to the dumbest legislation in the history of dumb workers’ comp legislation. The 2005 Amendments to the Illinois Workers’ Compensation Act were heralded as the biggest change to our legislation in 20 years!!! The problem with “change” as we heard in the last Presidential election is some times change is good and some times change is just change.

The folks who supported the agreed bill promised Illinois business $130 million in savings and Illinois labor would get $125 million of increased benefits. Sounds like a solid deal, doesn’t it. Well, trust us, it was all hogwash. The $130 million in supposed savings to Illinois business was to come from three sources:

1. A new medical fee schedule, limiting medical costs to about 76% of former billing;
2. An entirely new concept in Illinois workers’ compensation—utilization review of all care;
3. A new WC fraud scheme to stop bad guys and gals from making bogus claims.

Turns out the Illinois medical fee schedule actually may have caused medical costs to rise and not fall. Across the state, lots of doctors and hospitals raised their rates to the level provided by the medical fee schedule amounts or what was supposed to be the “ceiling.” Anyone in the health care industry continues to note Blue Cross/Blue Shield© still pays dramatically less for group medical care than any of the coding on the Illinois workers’ compensation medical fee schedule. We would be happy to have anyone statistically demonstrate how the medical fee schedule actually cuts medical costs and saves Illinois employers a dime because our clients don’t see it. As we have reported, the staggering cost being billed for implants charged by some providers remain a disgrace in this state. Oops, looks like their lobbyists were able to keep that out of even the fee schedule.

Also turns out the concept of utilization review could have been a great cost saver. We still remember talking to one of the legislative gurus about the fact UR was not mandatory in the legislation. His response was, the wise guys who run the Commission had quietly promised it wasn’t necessary and UR would be rigidly followed. Ooooops. Turns out it was Wise Guys 1; Legislative Gurus 0 at that game. As anyone will tell you, utilization review is not mandatory; it isn’t even much of a guideline any more. The Arbitrators and Commissioner kick it to the curb with the same lack of deference reserved for defense IME reports, surveillance and co-workers’ rebuttal testimony.

And last but not least, the Workers’ Compensation Fraud Unit apparently does their work when asked to do so. They will sort of follow-up on an investigation and make recommendations to the local state’s attorneys for prosecutions. However, the buck stops right there—we note there are about five or ten cases each year across the state where the state’s attorneys will actually take any sort of definitive action. Most of our clients’ requests for criminal charges and prosecutions are met with ennui and apathy. If a criminal complaint gets an answer at all, it is late and vacuous—workers’ comp fraud simply hasn’t caught fire with Illinois prosecutors. If one steals a $50,000 tractor-trailer, the prosecutors are on the front page of every local paper when they catch and imprison the scalawag; if the same man or woman would steal $50K in a fraudulent workers’ comp scheme, the prosecutors tell us it isn’t really theft and boys will be boys or girls will be girls.

So, what happened for Illinois labor? Well, most of our clients feel benefits have gone up on an exponential basis; greatly threatening the viability of every Illinois business and wrecking havoc with local government taxes because local, township and county governments can’t “move” to avoid skyrocketing comp costs, they have to find the money from their taxpayers.

Illinois labor got

1. A mandatory 7.5% increase in all permanency values other than the “body as a whole” provision;
2. Gigantic increases in minimum rates for TTD and PPD for low wage earners;
3. A wholly unnecessary 20% jump in death benefits to make Illinois one of the top three in the U.S. for death benefits—the minimum cost is now over $600,000 and the maximum is a tidy $1.6 million;
4. A wholly unnecessary increase in our worst and most abused benefit, Illinois wage loss differential benefit can now pay over $48,000 per year to someone who already has a job—for a 25-year-old entitled to max rate wage loss differential benefits, the lifetime payout would be over $2.4 million!

Other than the 2005 Amendments to the Act, we are now seeing three new very unsettling legal trends. First, Illinois firefighters with five years or more of service can be sitting at home eating a pizza and have a heart attack–such an event is now legally presumed to be related to work!!! We are certain to see headlines made when the first such Illinois claim hits the airwaves.

Second, we are seeing “repetitive trauma” become Legal Term A for global coverage by the employer of all human conditions and failings. By that we mean, we have claims in our office for “repetitive walking” and “repetitive driving” and “repetitive standing-up.” For some Arbitrators and Commissioners, if you see the word “repetitive” in a ruling, you can be sure benefits will follow. We truly feel this may end the litigation system in this state. We would invite anyone to tell us how you can actually “litigate” a repetitive walking claim as a compensable accident—what defense would anyone have? Claimant didn’t walk much?

Finally, we are also seeing Legal Term B or “traveling employee” become a new buzzword for global coverage of all actions. Again, we feel it may herald the end of a litigation system of handling workers’ comp claims because they are similarly indefensible. We researched 33 published claims decided by the Commission and if the term “traveling employee” was cited, full benefits were uniformly awarded. In our view, the silliest of these was two firefighters wrestling like school boys in a hotel room at a convention—because they were “traveling employees” the injuries were compensable! So if ever wrestling firefighter and truck driver and secretary walking to get a donut are globally covered for anything that happens to them, litigation is over and benefits are going to rise faster than pigeons at the 2016 Olympic Opening Ceremonies.

We blame all of it on Blago. But, in telling our readers of the problem, we also feel like Sean Connery in his classic line in the movie, the Untouchables: What are you prepared to do? Are we prepared to take any action? Can we reverse this mess and try to bring Illinois workers’ compensation back into line with our sister states? One guy we are starting to watch is the former President of the Illinois State Chamber of Commerce, Doug Whitley. Whether Democrat or Republican, we have always considered Doug a solid and brutally honest man—we are confident he would turn things around to truth, honesty and justice in Springfield. We also feel Doug would attempt to bring some sanity to the Illinois workers’ compensation system without tossing the proverbial baby out with the bathwater. Please take a look at his website at: http://doug4gov.com/.

If you have thoughts and comments about how to make sense of Illinois workers’ compensation and what we need to do to reform it in this state, please send it along and thanks.

Editor’s comment: On February 1, 2006, the 2005 Amendments to the Illinois Workers’ Compensation Act went into full effect. The secret people who run everything at the IWCC trumpeted the agreed-upon but still secret deal as a blockbuster for both sides. Illinois labor got a laundry list of benefits including heightened rates for low wage earners, higher PPD weekly values for everything but BAW, a jump in the maximum rate for wage loss claimants, higher minimum rates for amputation claims, a new and effectively unlimited rate for temporary partial disability and lots more.

Veteran business observers, including the partners of this firm, were concerned some of these legislative changes were purely illusory. For example, one provision extended the period an 8(d-1) award could be challenged and modified to sixty months. However, under the Cassens Transport ruling, we knew the labor side that controlled the Commission and reviewing courts had effectively stripped out any chance to modify such an award so it didn’t matter if they extended the period to infinity and beyond—it was a “right” that couldn’t be redeemed. We still think the management reps got bamboozled on that one.

In “exchange” for the many new and increased benefits for labor, Illinois management was touted as having received:

1. A shiny new medical fee schedule that would cut medical costs;
2. Utilization review, a new tool to limit duration of medical care;
3. A shiny new WC fraud provision to allow businesses to avoid having to pay phony claims and allow Illinois employers to counterattack when phony claims were made.

Well, in our view, it was all a sham, designed to make us feel like we got something when clearly we didn’t. Three years later, we are suggesting Illinois business considers simply repealing the whole thing when and if we ever get any sort of say in this process again.

Why do we make this bold claim? Well, we have been advised the medical fee schedule is not even close to providing the savings most carriers and TPAs get from “usual and customary” pricing. One veteran observer noted in most areas of our state, doctors and hospitals actually raised their prices to the level of the medical fee schedule—the “floor actually became the ceiling” as this observer pointed out. We had a veteran claimant attorney tell us that was wrong so we ask all of you the question, is the medical fee schedule good for Illinois business? Does it actually limit medical bills? Is it worth the time and effort? Can it be made better?

As to utilization review or UR, last week we received an unbelievably painful ruling where a former Petitioner-attorney who is now an Arbitrator wrote a chilling attack on the whole concept of UR. He literally attacked the scope and concept in any and every way possible. We are told most Arbitrators and Commissioners feel the same way. The injured worker suffered a soft-tissue strain and nine months later, wanted to continue treatment. UR said no. An IME with a neurosurgeon said no. Surveillance indicated claimant was healthy and outwardly normal. All diagnostic testing was negative. In light of all of that evidence, the Arbitrator said yes you need even more care, solely for your subjective complaints. A unanimous Commission affirmed—we assure all of you that highlights the fact that even the management commissioner is onboard with dropping UR as a tool in this state; he is following the trend.

We feel this case epitomizes the enormous flaw in the 2005 Amendments to the WC Act—the UR provision was voluntary and not mandatory. Trust us, the secret and hidden folks who run the Commission have totally backed off their bargain and are routinely ignoring UR like they ignore everything else that might actually rein in such shenanigans. The failure to follow UR as a tool to rein in medical care is a bitter pill for Illinois business to swallow. What we don’t understand is why a claimant who fractures one ankle in a non-work-related event is allowed by his group health care provider to treat for six weeks and then no more care based on UR. In contrast, if the same guy/gal fractures the other ankle at work, they can treat and remain off work for months and years in a virtual medical fantasy-land with no defined limits on doctors or other care-givers. As we have told our readers for years, we feel Illinois business should only have to “pay what Blue Cross pays” whether it is a workers’ comp or non-work-related event.

Finally, the WC fraud provision was also wholly illusory. The statutory changes created an investigative unit at the IDFPR to investigate both WC fraud by workers and uninsured employer compliance. They actually do investigate WC fraud by workers in an interesting and herky-jerky fashion. The problem which follows the investigation is that it falls into a black hole of prosecutorial indifference—there are about 2 of Illinois’ 102 counties that actually prosecute WC fraud. The State Appellate Defender’s Office that educates state’s attorneys across the state won’t teach WC fraud. In counties where they won’t prosecute WC fraud, they basically treat the charge and IDFPR investigation as a piece of moldy cheese—they won’t respond to anyone in any meaningful fashion. Our vote on WC fraud by workers in this state is to either get the state’s attorneys to prosecute or stop wasting taxpayer dollars investigating it in counties where they won’t. And cut the budget and lay the fraud-busters off.

Our message to all of our readers and to everyone on both sides of the Illinois workers’ comp system is to start to understand the U.S. economy is getting tougher every day. Businesses across the U.S. are attacking labor costs to insure their survival in the global marketplace. Trust us; there are managers and CPA number-crunchers going over every cost of operations in our state as it relates to other states and how it relates to world costs. Some of the thousands of layoffs in our state represent jobs lost that will never come back.

We need to position Illinois to be fair and reasonable in protecting injured Illinois workers. From the outside looking in, our system appears to create accidental injuries for which no state or country allows recovery. The Illinois WC system rewards laziness and malingering and physicians who over-treat. Even real injuries some times get benefits that are at both eye-popping and premium-busting levels. What worries us most is management will get back into control of the legislature, governor’s mansion and eventually the courts and the level of reform is going to “kill” this current system that seems almost totally out of control. We would hope the secret folks who run the Commission see that coming and try to make it fairer and more reasonable using tools you agreed to use any way. We appreciate your thoughts and comments.

Editor’s Comment: As we reported last week, in Smalley Steel Ring Company v. Illinois Workers’ Compensation Commission (No. 2-07-1050WC December 12, 2008) the Appellate Court, Workers’ Compensation Division reached a unanimous ruling in which they clearly determined workers’ compensation benefits have to be paid by the insurance carrier to someone they identify as a dead person who perished during the calendar year prior to the supposed “accident.” For a variety of reasons, we consider it one of the more quizzical outcomes in Illinois legal history. The way this happened is the party who testified was an imposter named Alejandro Atilano who took on the name of the dead person Harry Diaz at the first hearing (and all subsequent appeals). While we feel the court reached the correct technical conclusion, we think it was a total waste of everyone’s time and, sadly, the insurance carrier’s money—the impersonator shouldn’t get any benefit from the ruse.

Defense counsel apparently found out about the subterfuge and tried to have the Arbitrator reverse his award—the problem is the award in the name of the dead person was already final and non-appealable. When the Arbitrator recalled his decision and denied the claim, three unsuccessful appeals followed. As we pointed out last week, we don’t think the appeals were necessary and were effectively worthless—we feel there is no circumstance in which the impersonator Atilano would be allowed by a circuit court judge to collect any monies from an award in the name of the dead man, Diaz.

Please note our readers have inundated us with both criminal and ethical concerns we did not anticipate in first reviewing this decision. One comment from a noted Petitioner’s attorney is the impersonating claimant clearly perjured himself—Alejandro Atilano had to be asked his name under sworn oath and answer “Harry Diaz.” Mr. Atilano had to know he was lying and impersonating the dead Diaz.

Our reader also pointed out if counsel for claimant knew of the ruse prior to the first hearing, he should be subject to criminal investigation for subornation of perjury for his role in misleading the Arbitrator. As a secondary concern, such actions have to be reported to the Attorney Registration and Disciplinary Commission for their investigation and input. All lawyers have a duty to report misconduct when we become aware of it under the ruling in In re: Himmel.

Following that line of thought, we point out there is no question counsel for claimant knew his client was at least arguably lying about his identity after the motion to recall the decision was heard. Despite the clear presence of evidence indicating an impersonation was being foisted upon the courts, counsel for claimant had to sign and file not one but three knowingly false pleadings at the Commission, Circuit Court of Lake County and Illinois Appellate Court. Illinois Supreme Court Rule 137 states (in pertinent part):

The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good-faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.

How can a pleading, knowingly signed by counsel of behalf of an impersonator be “well grounded in fact?” Our reader felt the transcript of that hearing should be sent to the Lake County prosecutor for investigation and possible criminal charges.

Another reader asked the question: can Petitioner’s attorney continue to act on this claim? Does he have a valid representation agreement with Mr. Atilano if his agreement was made to represent decedent Harry Diaz? While we believe an attorney/client relationship would be perceived, we find most curious the question in what fashion can his attorney continue to act on his behalf in accordance with the Code of Professional Responsibility.

Rule 1-102(a)(4) of the Code of Professional Responsibility requires a lawyer refrain from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation.

A number of readers suggested a draft in payment of the award be issued to Harry Diaz and his attorney. If it were cashed, the insurance carrier should then seek prosecution for mail fraud and bank fraud. We don’t recommend knowingly “entrapping” anyone by such a scheme. But it does beg the question: what can Petitioner’s attorney do with a draft payable to Harry Diaz and his attorney? Would negotiating such a draft, duly obtained through a hearing and ruling from the Commission, constitute acts of fraud or other illegality by the attorney? Wouldn’t Petitioner’s attorney know his client forged the endorsement to negotiate the draft? Would assisting Petitioner in accessing the proceeds of the Commission award amount to assistance in the client’s pursuit of fraud in violation of Rule 1-102(a)(4)? We cannot see how it wouldn’t.

What about the entitlement of the medical care providers to receive payment for their services rendered to Petitioner, on whose behalf an award of medical payments was made? Innocent of any fraud, are they entitled to payment for services rendered out of proceeds from the award? If so, how do they access those proceeds? Can Petitioner’s attorney ever obtain a draft in payment of the award already rendered which he can legally negotiate to pay for the medical services awarded when he currently knows of his client’s fraud? Can Petitioner’s attorney ever move forward with the permanency aspect of this claim, awarded as compensable in a decision now irreversible by the Commission? As Petitioner’s fraud is patent and recorded in court documents, we feel the prohibition against fraudulent attorney activity set forth in Rule 1-102(a)(4) precludes any attorney from further action on any further claim for Harry Diaz, decedent regardless of its procedural posture.

As we have noted above, there is no indication Petitioner’s attorney knew of Petitioner’s fraud prior to issuance of the arbitration award, nor is there any fact in the record suggesting Petitioner’s attorney made any misrepresentations to the Arbitrator or Commission subsequent to trial. There is no indication the hearing officer had any reliable information of Petitioner’s fraud prior to recalling his decision. But moving forward, we all have knowledge of Petitioner’s fraud through the factual findings of these court decisions. So how does this case move forward from its 19(b) status to a final order? If Petitioner’s attorney does pursue additional measures on Petitioner’s behalf, what is the obligation of the rest of us watching from the sidelines?

Where do we go from here?

Well, to our knowledge this is a case of first impression. We have done substantial research and there are not a lot of cases involving ethical concerns related to civil claims brought by impersonators who are doing so to fraudulently hide their backgrounds. We sincerely hope this case doesn’t start a trend.

First, we urge all of our Arbitrators and Commissioners to follow the civil litigation rule which outlines claims brought in the name of dead people are a nullity. Once the Commission or anyone knew and confirmed Harry Diaz had passed some time earlier, a claim brought and appeals maintained in decedent’s Harry Diaz’ name should have been dismissed sua sponte or on the Commission or Court’s own motion. We feel it was a complete waste of the Commission and reviewing court’s limited resources to waste time with such a claim. We don’t know if there needs to be a Commission rule to that effect but if there isn’t one, there should be such a rule.

Second, if the person whose identity has been stolen is alive, we truly feel the caption of the case has to be modified in some meaningful way to make sense moving forward. The caption should have been changed to Alejandro Atilano appearing as Harry Diaz, deceased.

Third, we assert the claim of perjury has to be forwarded to the Lake County State’s Attorney for prosecution. While we have not seen the actual hearing transcript, the Appellate Court’s decision clearly indicates claimant committed perjury. The question of subornation of perjury by counsel should also be investigated. We will let the insurance carrier and its defense counsel make the call on that potential.

Fourth, we are sending this week and last week’s article to the Attorney Registration and Disciplinary Commission to see if they feel there are any other ethical concerns we have not addressed. We want to stress we are not filing a complaint; we are simply seeking ethical guidance on an issue of first impression.

This article was drafted by Joe Needham and Gene Keefe. Please direct your replies to jneedham@keefe-law.com or ekeefe@keefe-law.com. We welcome your comments.

Editor’s comment: The lead case we report this week is incredible. Like the ruling in Ming Auto Body v. IWCC we reported last week, the Illinois Appellate Court is strictly adhering to a 1941 Supreme Court ruling and won’t allow the Commission to remedy clear evidence of WC fraud first discovered after a decision is final. With respect to defense counsel, it appears they missed one important issue that doesn’t appear to have been raised. And as we explain below, unless the insurance carrier makes a colossal mistake and voluntarily pays this award to the wrong guy, we think the Appellate Court decision might have the diametrically opposite outcome from what the Court appears to be ruling.

For that matter, we wonder if all the judges, justices, Commissioners, attorneys and parties on both sides missed one major problem that may or may not need to be remedied. It is fascinating and unprecedented to consider the Court may have affirmed an award of benefits for a claimant who has appeared before the Commission, Circuit Court of Lake County and the Appellate Court fraudulently using the name of a dead person. While you, as a living person may be able to fraudulently appear using another living person’s name before the Commission if you aren’t caught before their decision is final, for reasons we will outline, we don’t think you can do it in the name of a dead person. We will let you, as our readers, comment as to whether the Arbitrators and attorneys on both sides should starting asking for ID’s and fingerprints before starting hearings.

Who’s on First, What’s on Second….?

The Commission’s two rulings awarded benefits to a person named Harry Diaz—claimant’s real name isn’t Harry Diaz! The Appellate Court decision is listed on the web as Smalley Steel Ring, Appellant v. Illinois Workers’ Compensation Commission, et. al., Harry Diaz, Appellee. The decision of the Appellate Court indicates, and we have no reason to believe they wouldn’t get it correct, an individual named Harry Diaz died in New York State on September 1, 2003. Mr. Diaz’ identity appears to have been conveniently used as a fraudulent part of the employment process. For reference, the injuries in this claim occurred July 9, 2004!! From the majority ruling, it appears claimant’s real name isn’t Harry Diaz, deceased; it is Alejandro Atilano. The decision from the Commission below and in the Appellate Court doesn’t have the moniker Alejandro Atilano on it. Any current claim by Alejandro Atilano for a 2004 injury is well outside the applicable statute of limitations and his attorney may have malpractice concerns for not filing a new claim in Atilano’s real name or amending the existing Application.

We wonder if and when someone is going to point out Alejandro Atilano can’t collect workers’ compensation benefits from a ruling that is “locked” by this court in the name of the departed, Harry Diaz—Mr. Atilano doesn’t have proper legal standing to do so. The irony of this ruling is the Court repeatedly makes it clear the ruling is final and can’t be changed. This technical finality should render it impossible to now file a motion to change the name of Petitioner from Diaz to Atilano. We also point out the insurance carrier could make a mistake and voluntarily pay monies to Mr. Atilano and not actually “satisfy” the Commission’s ruling—monies from the ruling will still be owed to Mr. Diaz through his estate.

From a purely academic perspective and not to sound silly, there are lots of Illinois rulings which find it is not technically possible to maintain a lawsuit in Illinois when you are dead. Once a person has passed, their estate is the entity legally created to take over a claim due to one’s passing. Unless and until the estate takes over for the deceased, dead people are considered a legal nullity; they don’t have standing to do anything. For example, dead people can’t sue you. A judgment solely in the name of a dead person can’t be collected; there is no one to pay it to. In pending common law claims brought by a living person who passes during the pendency of the action, you have a short period of time to substitute the decedent’s estate for the recently passed Plaintiff. In workers’ comp claims, when claimant passes, the Commission is somewhat more liberal to allow the estate to come in but they shouldn’t be that liberal when the claim is brought in the name of a decedent—having read both the Commission and appellate opinion, we assert this whole claim should have been a nullity from its inception. In deference to the Commission and reviewing courts, it wasn’t up to them to figure that out for counsels.

As it currently is written, the ruling of the Appellate Court requires Respondent and its carrier to pay benefits to a dead guy and not the person who appeared and testified and got the award. The tone of the award may imply Respondent is getting an unhappy legal outcome—we truly feel the opposite is true; neither party can be happy with this crazy result. As we indicate above, it is not possible to pay monies to a dead person. The insurance carrier does not and should not have to pay the Commission’s award of benefits to Alejandro Atilano on behalf of Harry Diaz, deceased—the Appellate Court ruling patently requires payment to Harry Diaz. If Mr. Diaz has an estate, that entity would have to seek such payments, if there is anyone around who qualifies or wants them. We also point out to the insurance carrier that, if they make the mistake of voluntarily sending monies to Alejandro Atilano and his attorney, they will not have satisfied the award of the Commission and the monies from the ruling may still be owed to decedent Diaz’ estate.

If the insurance company doesn’t pay Alejandro Atilano, in order to collect this award, the attorney who is proceeding for what we feel may be a scam artist will have to file suit to get a judgment on the award of the Commission under Section 19(g) of the Act in the name of the dead person. Having round-tabled this ruling among the members of our firm, we feel confident a circuit court judge can provide a judgment to the estate of Harry Diaz if one is created by his heirs, relatives or friends. We cannot conceive any scenario in which a circuit court could give a judgment on an IWCC decision that only names Harry Diaz to a random person named Alejandro Atilano. We also invite your thoughts and comments as to whether claimant’s attorney has a binding legal fee agreement with Harry Diaz, if the IWCC Attorney Representation form was fraudulently signed by Mr. Atilano.

Therefore, if a 19(g) proceeding is filed; we suggest the insurance carrier make certain a motion to dismiss be filed because Alejandro Atilano has no standing to seek a judgment on a final decision for workers’ compensation benefits in the name of Harry Diaz, deceased. We don’t think Mr. Atilano or his counsel can appear before a Lake County Circuit Court judge with a decision solely in the name of Harry Diaz and say “they didn’t mean him; they meant me, so make the check payable to me.” We also wonder whether the employer/insurance carrier could file a cross-complaint for fraud in response to a 19(g) action to obtain a judgment against Mr. Atilano for his apparent fraud in obtaining the Commission’s award. We assure our readers if we were handling, we would be certain to do so.

In Smalley Steel Ring Company v. Illinois Workers’ Compensation Commission (No. 2-07-1050WC December 12, 2008) the Illinois Appellate Court, Workers’ Compensation Division held that even with strong evidence of claimant fraud, the Arbitrator lacked authority, after his decision had become final, to recall the decision and conduct a new hearing for any purpose except correcting technical or clerical errors. On August 31, 2004, claimant sought WC benefits from his employer. After a hearing over the objection of the employer—specifically due to their request to confirm Petitioner’s identity—an award was made with decision issued April 7, 2005. The decision was not appealed by either party and instead an “emergency motion to recall the arbitrator’s decision and reopen proofs” was presented by Respondent and was granted absent appearance by Petitioner or his counsel. At the second hearing, again without Petitioner or his counsel present, the Arbitrator issued a second decision denying benefits based upon evidence Petitioner’s identity was fraudulent. Petitioner appealed the second decision and the IWCC reversed and reinstated the initial award. This was affirmed by the Lake County Circuit Court and employer appealed, arguing the Commission erred by finding the arbitrator did not have the statutory authority to recall his first decision, reopen proofs, and issue a second decision.

A brief review of the facts confirms claimant filed an Application stating an apparently phony name and alleging he injured his left upper extremity pulling a rack at work. On January 31, 2005, an arbitration hearing was conducted. The employer requested a 30-day continuance, in part to obtain verification of claimant’s identity, asserting claimant provided a social security number which belonged to a dead person. Claimant objected and the Arbitrator denied the employer’s motion and proceeded with hearing and issued an award for Harry Diaz on April 7, 2005. As we indicate above, more than thirty days then elapsed, at which time, a coworker confirmed claimant Atilano previously worked for a different company and while employed at the other company, he suffered a work-related injury to his left shoulder and underwent left-shoulder surgery. He also sought benefits and the earlier claim was settled for 25% loss of use of his left arm.

In the unanimous ruling, the Appellate Court again noted unless a party files a petition for review of the Arbitrator’s decision within 30 days after the party’s receipt of a copy of the decision and notification of when it was filed, the Arbitrator’s decision “shall become the decision of the Commission and in the absence of fraud shall be conclusive.” They further noted Section 19(f) of the Act permits the Arbitrator and the Commission to recall their respective decisions to correct clerical or computational errors. The Court noted in Wilson-Raymond Constructors Co. v. Industrial Comm’n, the employer filed a petition to recall the Commission’s decision and requested reconsideration of the merits and to present further evidence due to evidence of fraud. Its petition was filed prior to the expiration of the time frame within which it could seek judicial review of the Commission’s decision. The Supreme Court noted the Act contained no authorization for the filing of such a petition and stated, although section 19(f) provided for petitions to recall in the event of clerical or computational errors, no such error was involved. The Court again noted fraud was not a basis for extending the statutory authority of the arbitrator or the Commission. In Michelson v. Industrial Comm’n, the Supreme Court declined to find the legislature intended the “in the absence of fraud” language to give the Commission the authority to set aside its orders on the ground of fraud. It also noted, without express authority, the Commission was without jurisdiction to so act and the parties were “relegated to a court of equity for relief under a charge of fraud.”

This Court also noted their recent decision in Ming Auto Body v. Industrial Comm’n confirmed a party may maintain an action before the circuit court to procure relief from a judgment of the Commission based on fraud and also directed readers to Roadside Auto Body, Inc. v. Miller where a declaratory judgment action sought to vacate, as fraudulent, a settlement agreement approved by the Commission. The Court noted in certain circumstances, a court can review an otherwise conclusive decision by the Commission, even if the procedures and time limitations set forth in section 19(f)(1) have not been followed. This Court also specifically noted Section 25 of the Act expressly provides for criminal penalties and civil liability in the event of fraudulent workers’ compensation claims and noted deficiencies in the Act should be addressed by the legislature. We point out Section 25.5 of the Act was one of the hollow legislative reforms provided in the 2005 Amendments to the Act—it only allows for damages due to fraud if claimant has been criminally convicted of such fraud. It is hard to file suit against someone convicted of WC fraud when most of Illinois’ state’s attorneys refuse to prosecute even the clearest cases of WC fraud.

We also point out to all of our readers this Court doesn’t say clear evidence of fraud is to be ignored or rewarded–they simply require the defrauded employer/insurance carrier to sue the con artist in circuit court. We assure everyone our firm has a number of such fraud claims pending under theories of common law fraud and under the Illinois Insurance Fraud Act. The Fraud Act allows for treble damages, costs and attorney’s fees to be recovered. We remain fascinated that more self-insured employers and insurance carriers don’t bring such claims—we feel there may be something of a fatalist mentality among claims handlers who lose too many workers’ comp claims. The deck isn’t as clearly stacked against you in a common law action, as some folks feel it is in the Illinois workers’ compensation arena.

We like strict adherence to the statute and hope this ruling will signal a trend that both sides’ WC rights + duties will be measured by following the “English language” version of the Act

Please also note it is difficult for us to argue with the reviewing courts of this state when they closely adhere to the statute as it appears they have done in this ruling and Ming Auto Body. In writing the majority ruling indicating WC fraud cannot be addressed by the Commission, Justice McCullough wrote “[s]uch deficiencies in the Act should be addressed by the legislature.” However, we wish a similar adherence to the letter of the law should also apply to the other side of the WC matrix in this state. We point to numerous “language-bending” rulings to benefit claimants like

• Durand v. IC where the Illinois Supreme Court effectively stripped out the statute of limitations in workers’ compensation claims—we are not aware the legislature meant the statute of limitations in Section 6(c) should be a guideline or suggestion to be followed when convenient to claimant but actual limiting legislation that was intended by the legislature to be binding on both sides;
• General Tire and Rubber Company v. IC and a secret unnamed Rule 23 ruling from this current year where the reviewing courts awarded mileage expense for a injured worker to attend medical care with treating physicians—we assure our readers there is no provision in the Illinois Act or Rules that provides this benefit and will donate $1,000 to the favorite charity of anyone who can point to an actual legislative or administrative provision that supports either of these rulings;
• First Assist v. IC where the reviewing court noted Section 8(d)(1) of the Act would only apply to award wage loss differential benefits where a claimant could no longer work in their “usual and customary line of employment” but still awarded such benefits to a nurse who obtained a lower paying wage as a nurse. Following the plain “English language” view of the Act, we think a nurse who, after suffering injury returns to working as a nurse is in the same “line of employment” and therefore shouldn’t qualify for such benefits.

We aren’t certain of what the courts may do if Mr. Atilano and his counsel comes for a judgment on the award in Mr. Diaz’ name. It is possible they may bend over backwards to find some new and unusual legal device to change the “unchangeable” award. We certainly hope they don’t do that. The Smalley Steel Ring Company ruling again highlights the need for early defense preparations to ensure you have all evidence in place before any hearing in a claim. KC&A performs background research on every case to determine all potential evidence which may aid in defense of a claim. It is unclear why the case was not immediately appealed after an apparent forced hearing over defense objections based upon the fraud suspicions. Respondent may have realized the presence of fraud before the decision became final (as you have 30 days from the receipt of a decision to appeal and decisions are rarely received the within 3 days after they are issued). Instead of an appeal, an “emergency motion to recall the decision” was presented 33 days after the decision was issued. Although we have no access to defense strategy notes, this writer always strongly recommends an immediate appeal after being forced to hearing in such a manner.

This article was researched and written by Eugene F. Keefe, J.D. and Shawn R. Biery, J.D. If you have thoughts and comments or need the case citation(s), please send a reply to ekeefe@keefe-law.com or sbiery@keefe-law.com.

Editor’s comment: As we warn clients on a regular basis, you need to make sure you have all evidence in place before any hearing in a claim because you generally only get one bite at the defense apple. This is one of the reasons KC&A performs background research on every case to determine all potential evidence which may aid in defense of a claim. In this case, the fraud appears to have occurred after the causal connection issue was determined and the determination became final. The earlier ruling on the issue could not be ignored or subsequently reversed even though impeachment at the subsequent hearing revealed Petitioner’s fraud in his efforts to continue to obtain workers’ compensation benefits. While the decision does not sit well due to the significant PPD award even with evidence of fraud, there is some unhappy solace for Illinois employers as the Arbitrator and the IWCC terminated Petitioner’s benefits going forward while Petitioner was attempting to prove permanent and total disability.

In Ming Auto Body v. Industrial Commission, (No. 1-07-1125WC November 18, 2008), the Illinois Appellate Court, Workers’ Compensation Division considered a claim for an accident on October 5, 1990. In November 1995, a 19B hearing was held. At the 19B hearing, claimant testified he was a 29-year-old mechanic and sustained a work-related injury to his back lifting in order to perform repairs on a car. Claimant did not report the injury to his employer until the following Monday, and he sought medical treatment after reporting the event. About a year later, claimant underwent a spinal fusion. There was conflicting evidence as to whether the claimant injured his back helping a neighbor repair a grain auger, the day following his alleged work accident.

In their evidence depositions, two of the claimant’s treating physicians felt the condition was related to work and a spinal fusion was performed. Claimant was later released to permanent medium restrictions. Rod removal surgery was recommended. A second treating physician felt claimant was unable to return to his previous occupation as a mechanic. The Arbitrator ruled surgery to remove the rods should proceed. The Commission affirmed and adopted the award, including findings claimant had sustained an accident and his condition of ill-being was causally related. The Commission ruling was not appealed.

Some time later, the parties appeared before a different arbitrator seeking additional medical expenses, TTD benefits, and permanency. It appears from the record claimant lied on his job resume and lied when he testified he wasn’t working. It appears claimant not only returned to work at the same levels worked prior to injury but he worked for lots of different employers.

Claimant was asked whether he had sustained any other serious injury or trauma since October 1990 and he affirmatively stated he had not. He asserted all of his back problems were attributable solely to the 1990 injury. On cross-examination, claimant admitted he was involved in a non-work-related automobile collision on October 30, 1996. He acknowledged he “felt additional discomfort” in his back due to this collision and filed a lawsuit that was eventually settled. Sworn answers to interrogatories in that lawsuit referenced his employment injury but also indicated he was seeking damages for medical expenses involved in his workers’ compensation claim.

The Arbitrator determined she could not alter the prior 19B decision awarding benefits but found claimant lied under oath and perpetrated a fraud on both Respondent and the Commission. The Arbitrator concluded claimant had not established causal connection between his October 5, 1990, work accident and his present condition of ill-being or the need for medical treatment rendered after February 2, 1993. Accordingly, the Arbitrator refused to award any further benefits under the Act. We salute her ruling.

The Commission concluded the doctrine of “law of the case” precluded a subsequent challenge or review of the earlier findings. In light of the prior final decision, therefore, the Commission modified the decision of Arbitrator Neal to find there was a causal connection between the claimant’s October 5, 1990, employment-related accident and the subsequent rod-removal surgery performed by Dr. Andersson in February 1996. The Commission awarded 25% of the person, TTD and medical to May 31, 1996 and no further benefits. Please note this is a modest PPD award for a claimant who underwent fusion surgery to the spine. With respect to our Commissioners, we feel this rewards fraud.

In analyzing the Commission’s ruling, the Appellate Court notes Section 19(f) of the Act states  “[t]he decision of the Commission acting within its powers * * * shall, in the absence of fraud, be conclusive unless reviewed as in this paragraph hereinafter provided.” 820 ILCS 305/19(f) (West 2002). The Appellate Court ruled the Commission could not change its prior rulings and relief for the fraud could only come from a circuit court filing. The Court specifically found a party may maintain an action before the circuit court to procure relief from a judgment of the Commission based on fraud such as a declaratory judgment action seeking to vacate, as fraudulent, a settlement agreement approved by the Commission.

Since we do not have access to the defense strategy notes and preparation, in hindsight it is difficult to determine if the award is due to errors in defense strategy or simply a function of a flawed system which has no strong “fraud-deterrent” regardless of the 2006 changes. Since the evidence presented at the initial hearing was used to support the PPD award, it would appear the denial of PTD benefits was the “punishment” Petitioner received for his fraud, however a 125 week PPD award resulting in approximately $58,000 in benefits is not a bad payday for a claim which obviously had questions regarding a lack of reporting over a weekend in which another injury was highlighted and subsequent testimony at the second hearing which showed Petitioner was not ashamed to lie and seek to mislead both the Arbitrator and the Commission.

While this Court felt a circuit court action for fraud might lie, an aggressive risk manager has to consider if a circuit court claim against Petitioner would be successful in obtaining reimbursement of payments made based upon the evidence of Petitioner’s outright fraud and lack of credibility, which may be much greater than the Arbitrator could have known during the first hearing. To the extent this Court indicated workers’ compensation fraud was present in this record, we would recommend filing an action for both common law fraud and a count under the Illinois Insurance Fraud Act that might allow the employer to recover a judgment against the charlatan in amount of triple the benefits paid due to fraud plus your attorney’s fees and costs.

This article was researched and written by Shawn R. Biery, J.D. If you have thoughts and comments or need the case citation, please send a reply to sbiery@keefe-law.com.

Editor’s comment: In 1970, Congress passed the Racketeer Influenced and Corrupt Organizations (RICO) Act, Title 18, United States Code Sections 1961-1968. At the time, Congress’ goal was to eliminate the ill-affects of organized crime on the nation’s economy. To put it bluntly, RICO was intended to destroy the Mafia. Throughout the 1970’s, RICO’s intended purpose and its use ran parallel to each other. Seldom was RICO used outside of the context of the Mafia, and civil claims under RICO were simply not brought.

In the 1980’s, however, Plaintiff lawyers noticed section 1964(c) of the RICO Act, which allows civil claims to be brought by any person injured in their business or property by reason of a RICO violation. Any person who succeeded in establishing a civil RICO claim would automatically receive judgment in the amount of three times actual damages and would be awarded their costs and attorneys’ fees. The financial windfall available under RICO inspired lawyers across the nation, and by the late 1980’s, RICO was a commonly asserted claim in federal court. Everyone was trying to depict civil claims, such as common law fraud, product defect, and breach of contract as criminal wrongdoing, which would in turn enable the filing of a civil RICO action. RICO’s broad application was the result of Congress’ inclusion of mail and wire fraud as two crimes upon which a RICO claim could be brought. Given the activities that had historically been criminally prosecuted under mail and wire fraud statutes, it was not difficult for creative civil attorneys to depict practically any wrongdoing as mail or wire fraud.

During the 1990’s, the federal courts, guided by the United States Supreme Court, engaged in a concerted effort to limit the scope of RICO in the civil context. As a result of this effort, civil litigants must jump many hurdles and avoid many pitfalls before they can expect the financial windfall available under RICO, and RICO has become one of the most complicated and unpredictable areas of the law. Today, RICO is almost never applied to the Mafia. Instead, it is somewhat randomly applied to individuals, businesses, political protest groups, and terrorist organizations. In short, a RICO claim can arise in almost any context.

Last week, the Sixth Circuit Court of Appeals handed down a stunning decision. For the first time in U.S. history, a federal court ruled injured workers may pursue civil claims for damages under RICO based on an alleged scheme to “wrongfully deny” the workers’ claims for workers compensation benefits. In Brown v. Cassens Transport Co., (October 23, 2008 No. 05-2089), the Court considered workers’ compensation claims by a group of six injured workers who claimed their employer, the TPA that administered their workers compensation claims and an examining physician, “employed mail and wire fraud in a scheme to deny them worker’s compensation benefits.” More specifically, the injured workers alleged the employer and TPA deliberately selected and paid supposedly unqualified doctors to give allegedly fraudulent medical opinions that would support denial of worker’s compensation benefits, and defendants ignored other medical evidence in denying benefits.

The court, in reversing a district court decision dismissing the case, ruled the workers pled a pattern of racketeering activity based on commonalities of the defendants’ acts:

(1) The common purpose of reducing the employer’s payment obligations towards worker’s compensation benefits by fraudulently denying worker’s compensation benefits to which the employees are lawfully entitled;

(2) The common result of denying worker’s compensation benefits to certain employees who are entitled to such benefits under Michigan law;

(3) Common participants including worker’s compensation officials at the employer and the TPA along with a doctor who the plaintiffs allege, with regard to some of the predicate acts, fraudulently recommended ineligibility of benefits at the request of the employer and TPA;

(4) Common victims in the injured employees eligible for but wrongfully denied worker’s compensation benefits; and

(5) Similar methods of commission, the fraudulent application of legal standards to wrongfully deny worker’s compensation benefits to eligible employees.

The court further held Defendants’ predicate acts were continuous under both closed or open-ended theories because they had gone on for a time span “well over three years” and were alleged to have been Defendants’ standard way of doing business: “fraudulently denying benefits to which the employees are entitled through the use of fraudulent communications by mail and wire.” We point out an employee is not “entitled” to workers’ comp benefits unless and until an arbitrator rules you are.

The court also addressed two other RICO issues. First, detrimental reliance by the injured workers on defendants’ allegedly fraudulent misrepresentations was not an element of a civil RICO claim based on a Supreme Court ruling in Bridge v. Phoenix Bond & Indem. Co., (No. 07-210 June 9, 2008). Second, the workers pled a compensable RICO injury because “[d]efendants’ fraudulent acts were a ’substantial and foreseeable cause’ of the injuries alleged by Plaintiffs: the deprivation of their workers’ compensation benefits and expenses for attorney fees and medical care.”

Ouch. We remain amazed, dazed and confused by this ruling. Initially, we want all of our readers to note this is an attack on a long-time Illinois employer that doesn’t need these unnecessary costs, legal fees and exposures while doing work in Michigan. We laughingly note how the Michigan Governor’s office is literally begging employers to come to Michigan—this case represents a giant “Go Back” sign to companies from outside Michigan who might consider setting up operations there.

Second, we want everyone to understand we don’t feel there is any need to bring such matters to a federal forum. The respective state administrative agencies do a modest to marvelous job making sure injured workers are protected in their workers’ compensation administrative bodies. If an injured worker has a complaint with denial of a claim, they should bring it to the correct state body and get relief to which they may be entitled under their Act. As we have urged everyone in the Illinois system, if hearings and rulings are ramped up and resolved in a timely manner, employees shouldn’t be able to complain about unnecessary delays.

Third, please also remember the burden of proof in most WC systems remains on the injured worker—this RICO action clearly shifts that burden to the employer, its TPA and examining physician. As academicians, we assert an injury isn’t “covered” under workers’ compensation unless and until the employee makes the claim and an Arbitrator makes a ruling which agrees with the employee’s assertions. Trust us; thousands of workers every day of every year waive workers’ compensation claims and benefits for hundreds of reasons—there is no duty in any WC Act we are aware of that forces the employer to provide benefits an injured worker doesn’t seek nor want. We also note there are lots of solid claimant lawyers out there who know the ropes and navigate questionable or difficult claims to a proper conclusion—is it “fraud” if an employer doesn’t anticipate every conceivable theory or concept that may lead an injured worker to get benefits?

Fourth, we hate the presumption brought to every aspect of the pleadings in this case that summarily defines it as “fraud” when any workers’ compensation claim is ever denied. It is not illegal and clearly not “fraud” to deny a workers’ compensation claim. We caution the many Petitioners’ attorneys who are zealots to remember you won’t typically be able to get work from injured workers with rapidly accepted claims—claimants don’t need lawyers when their claims are quickly accepted and all benefits are paid in a timely fashion. If Plaintiff lawyers start to routinely threaten every employer, every TPA and every doctor in the WC systems across the U.S. with monster, class-action-type RICO claims and the concomitant costs, treble damages and double attorney’s fees, you are going to put an enormous industry-wide emphasis on rapidly accepting even questionable claims and driving everyone away from lawyers on both sides. Is that what you want?

Fifth, please remember U.S. business can counterattack. We understand three of these Plaintiffs lost their workers’ compensation claims before the Michigan WC board. Could this employer counter-sue under RICO for their arguably fraudulent claims?

We caution everyone to understand this ruling merely found the federal claim under RICO would not be dismissed and will proceed to hearing, if it is not otherwise dismissed or settled. We will continue to track the outcome and to the extent possible, report it to all of you. We appreciate your thoughts, comments and concerns about this ruling.

Editor’s comment: It’s Canada, but we can hope, ehhh? From the web at http://www.edmontonsun.com/News/Edmonton/2008/10/15/7093606.html

A “pathological liar” who defrauded the Workers’ Compensation Board of nearly $800,000 while working there as a case manager has been put behind bars. Sandra “Sam” Plumite, 40, was sentenced to three years in prison this morning after the judge hearing the case rejected her plea for community-based house arrest. “A sentence in the community is not appropriate to emphasize denunciation and deterrence,” said Court of Queen’s Bench Justice Robert Graesser. “This was a theft of a very large scale from an employer who trusted her,” said Graesser.

The judge accepted Plumite suffers from a number of psychiatric and psychological issues due to an “unfortunate and tragic childhood” and needs extensive therapy. However, Graesser ruled they do not reach the level of exceptional circumstances, which is needed to trump a required denunciatory sentence for employer theft. “I am not satisfied she is not a danger to the community,” said Graesser, calling her a high risk to re-offend in a similar fashion. “As a pathological liar, she cannot be trusted to be honest to any future employer.”

The judge also ordered the St. Albert woman to pay $769,106.77 in restitution to the WCB. Plumite earlier pleaded guilty to charges of fraud over $5,000, corruptly accepting a secret commission and uttering a forged document. The Court heard she had accepted $117,500 in illegal payments to her bank account from an injured worker who was getting extra WCB money he was not entitled to as a result of her doctoring his claim.

Even the fraudster’s resume was phony as court heard Plumite had bolstered her job application by falsely claiming she had received two diplomas from Grant MacEwan College and lying about a previous bank job.

According to a statement of admissions, Plumite worked as a WCB case manager from Sept. 5, 2000, to June 24, 2003, and her job consisted of reviewing claims of injured workers and deciding what benefits they would get. Plumite’s frauds were discovered when WCB management did a review of the injury claims of one of her clients, Gurcharn Singh Sidhu, after becoming aware of a large number of unjustified payments to him authorized by her. The review disclosed Sidhu received more than $300,000 in benefits he was not entitled to and further investigation revealed he had made eight deposits to Plumite’s personal bank account totaling $117,500. Further reviews showed Plumite had approved other unauthorized payments to more than a dozen WCB claimants using a variety of deceptions, court heard. The total of the overpayments was $769,106.77.

Some of the deceptions included modification of WCB computer system records; giving advance payments, but failing to make the required deductions from the regular payments; and making large settlement payments without any supporting medical diagnosis or documentation. Court heard Plumite also authorized hugely inflated mileage payments or training allowances, payments for child care expenses for persons with no minor children and benefit payments for an injured worker who had died.

According to the statement of admissions, Plumite also reopened the closed file of one injured worker who happened to be a friend of her ex-husband so that she could repay him money that she had borrowed. In January, Sidhu, a 52-year-old Airdrie man, was given a two-year conditional sentence to be served in the community, followed by three years of probation, after pleading guilty to paying a secret commission to Plumite.