Category Archives: Workers’ Compensation Insurance

2013’s Top Cases of Workers’ Comp Fraud

Workers’ comp fraud: the phrase conjures images of employees playing hooky and pretending to suffer from crippling injuries sustained at work, all while cashing in a nice, big check from their innocent and well-meaning employers. Right?

Wrong. According to a list compiled by Professor Leonard T. Jernigan, Jr., 49 of 50 fraudulent workers’ comp cases in the past 5 years were actually the result of an employer’s wrongdoing. Take a look at five of the top ten cases of workers’ comp fraud in 2013, and see for yourself.

Case Number 1: Owners of a Miami-Dade supermarket chain almost get away with $35 million in fraudulent workers’ comp-related transactions.

The proud owners of Diaz Supermarkets, John and Mercedes Diaz, were arrested and accused of $35 million of workers’ comp fraud (among other illegal and fraudulent transactions), including, failure to provide coverage for employees for ten years.

Case Number 2: A California labor contractor learns that a business by any other name is still the same business.

Richard Escamilla, Jr. accrued $4.1 million by creating new business names and filing for insurance, thus avoiding the need to provide a claim history. Mr. Escamilla will serve up to 6 years in prison, and must find a way to repay the $4.1 million that he now owes California workers’ comp insurance carriers.

Case Number 3: Michigan-based insurance executive charged with embezzling $2.6 million from workers’ compensation TPA.

Former CEO Jerry Stage and employee John Bauer found themselves in a tight spot last June. After the two were caught embezzling money from the Compensation Advisory Organization of Michigan—which they’d been doing for 10 years—they’ve been asked to repay all $2.6 million. Did we mention that both Stage and Bauer were employed by a non-profit workers’ comp insurance company?

Case Number 4: A father and son landscaping business in California turns out to be a lot less wholesome than it seems.

Father-son team Jesse and Carlos Contreras were accused of committing $1.45 in insurance fraud. From January 2008 to March 2012, the two “misclassified” their employees, defrauding the California State Compensation Insurance Fund and earning themselves up to 19 years in prison—each.

Case Number 5: A California cleaning company sweeps payroll under the rug.

The president of Awesome Products, a cleaning company based out of California, was found guilty of underreporting his total payroll by $8 million. (That’s quite a rounding error.) His mathematical sleight of hand resulted in a premium loss of $898,000.

If you have legal questions or concerns, contact Atlanta workers’ comp attorney Michael Moebes at (404) 354-5432, or visit him online at

Atlanta Workers’ Comp Lesson Number 1: Check Your Mail

Full-MailboxReady Mix USA can testify that one of the quickest ways to lose a workers’ comp case is to ignore a notice sent by the Georgia Courts. After failing to show for a worker’s compensation hearing for one of their employees, Terrell B. Ross, both Ready Mix and their insurance company, Liberty Mutual, found themselves paying for full temporary disability benefits.

As you might imagine, Ready Mix and Liberty Mutual did not go down without a fight. Shortly after a small oversight turned into a hefty bill, both companies banded together and tried to have the hearing vacated. Their reasoning? The courts hadn’t provided adequate notice.

Now, let’s take a look at where this all started. In December 2009, Terrell Ross noticed pain and tightening in his back while swinging a sledgehammer. He followed the rules and immediately reported this to his supervisor. (His supervisor did not follow the rules, and failed to refer him to one of Ready Mix’s appointed physicians.)

One week later, Ross noticed pain in his lower back, and took the opportunity to gently remind his employer of the previous injury report. This time, Ross’s supervisor sent him for a medical evaluation, where he was diagnosed with lumbar and thoracic strain resulting from his occupation. The physician recommended that Ross be put on light duty, and prescribed pain medication and physical therapy for treatment. Several weeks later, Ross went to see a physician who specialized in such treatments; this doctor requested that Ross undergo a surgical MRI.

After seeing the results of the MRI, the physician sent Ross to an orthopedic spine specialist, who recommended facet injections—a treatment that would take Ross out of commission until May 2010. Ross’ work status was recorded as “totally disabled” until the workers’ comp board approved the facet injection treatment.

At this point, Ross requested a hearing with the administrative law judge (ALJ) to ask for permission for an MRI, facet injections, TTD benefits, attorneys’ fees, and a 15% penalty for nonpayment. In addition, he served both Ready Mix USA and Liberty Mutual with discovery requests.

When the hearing rolled around in July 2010, both Ready Mix and Liberty Mutual were no-shows. (Even worse, they provided no responses to Ross’s request for discovery documents.) Ross testified before the ALJ, and was promptly given everything he asked for.

Shocked by the turn of events, Ready Mix USA and Liberty Mutual claimed that they hadn’t received adequate notice for the hearing, and insisted that the ALJ vacate the hearing and allow them to “amend” their responses to the Ross’s request for discovery.

Unsurprisingly, the ALJ refuted both companies’ motions. After all, they had been notified by both e-mail and snail mail—and the court had physical records of mailing the notices, meaning that the onus was entirely on Ready Mix and Liberty Mutual.

The moral of the story here, ladies and gentlemen, is that ignorance is not always bliss, and that you should always check your mail—especially if you’re in the middle of a workers’ comp case.

Contact Atlanta workers’ comp lawyer Michael Moebes at (404) 354-5432 for legal advice.

Goodwill Under Fire for Treatment of Disabled Workers

2013 was not the best year for Goodwill. Although it is a nonprofit organization that claims to offer both employees and customers a helping hand, it has faced multiple accusations of grossly underpaying its disabled employees. According to the National Federation of the Blind (NFB), the charitable corporation’s payroll policies allow for “payment of wages as low as pennies per hour” for workers with disabilities.

Given Goodwill’s reputation for helping the disadvantaged, this certainly seems like a concern. But, is the nonprofit organization really guilty of this dreadful accusation?

After a little investigation, PolitiFact Georgia found that only 64 of Goodwill’s affiliate agencies paid disabled workers below the minimum wage, affecting a total of 7,000 workers. (Other reports suggested that these same workers were paid anywhere from 22 cents to 4 dollars per hour.)

While this may seem illegal, it turns out that the Special Minimum Wage Certificate, a provision enacted under the Fair Labor Standards Act of 1938, actually allows employers to pay those with disabilities below the minimum wage.

While PolitiFact’s investigation also revealed that the Atlanta, Macon, Savannah, and Columbus, Georgia Goodwill affiliates all pay their disabled workers at least the minimum wage ($7.75/hour), it also found that two of them possess the Special Minimum Wage Certificate, meaning that they could decide to lower wages and still be within their legal rights—a frightening prospect, to say the least.

On October 31st, 2013, the NFB rounded up 170,000 signatures calling for Goodwill to amend their policies, and force all of their affiliates to pay disabled workers the minimum federal wage. The fight continues in Washington, D.C., where concerned lawmakers are challenging Goodwill’s status quo and pushing for the rights of all workers.

Contact Atlanta workers’ compensation attorney Michael Moebes at (404) 354-5432 for legal questions or concerns.

Temporary Workers Face Higher Risk of Workplace Injuries

Olga Pierce, Jeff Larson, and Michael Grabell of ProPublica, a non-profit organization that provides high-quality, investigative journalism, brought some disturbing facts about temporary work to light in an article titled “Temporary Work, Lasting Harm.”

According to ProPublica’s analysis of workers’ compensation claims across the United States, temp workers in high-risk states like California and Florida are 50% more likely to be injured on the job than permanent employees. Worse still, the nature of the injuries suffered by temp workers are far more serious. A review of workers’ comp claims in Florida revealed that temps were more likely to suffer severe trauma, such as fractures, punctures, and crushing injuries.

Why this startling discrepancy in the rate of injury?

When a permanent employee is injured, companies find themselves paying higher insurance premiums and footing the bill for medical costs, lost wages, and pain and suffering. When a temporary worker is injured, the recruiting agency pays for any workers’ comp, leaving the company with no incentive to properly train its workers and enforce safety procedures.

And that’s the best case scenario. In many instances, the temp firm and the company fight over who should pay workers’ comp costs, delaying the delivery of vital medical care until the issue is resolved.

If we know all of this, why aren’t lawmakers working to protect temp workers? It’s not for lack of trying. Concerned policymakers find that they are hard-pressed to make any real changes because there simply isn’t enough evidence. Although it tracks most industries, the federal government doesn’t keep tabs on injury rates for temporary workers.

There is progress—but it comes at a price. Rather than enacting proactive safety policies, many companies who hire temp workers often scramble to enforce life-saving measures after tragedy strikes—and after “business as usual” takes a financial toll.

If you’ve suffered an injury at the workplace, contact Georgia workers’ compensation attorney Michael Moebes at (404) 354-5432 for a free consultation.


Can the workers’ comp defense attorney threaten to have me deported to force a low settlement?

Imagine this scenario:

A nursing home employee–let’s call her Janice–is injured on the job when she slips and falls on an unmarked wet spot on the floor. She immediately reports the injury to her supervisor and proceeds to file a request for medical benefits, temporary disability benefits, and whatever else she may need in the time that she spends recovering from her injury.

Janice’s employers look over her request for temporary disability and medical benefits, and frankly, they don’t want to play ball. Still, they know that things could get ugly if Janice was outright denied financial and medical support during her time of need. What if she brought in an attorney and sued for late payments and legal fees?

So, instead of playing by the rules, Janice’s employers decide to do a little research on their injured employee. Lo and behold, they find that Janice is not a legal citizen of the United States–her Visa expired ages ago, and she hasn’t made any attempts to renew it.

The next day, Janice’s employer gives her a call, and explains that they will provide her with temporary disability payments, but nothing more. Of course, Janice protests–after all, she wouldn’t have been injured if it weren’t for the careless behavior allowed by the facility. But when she learns her employer knows about her expired Visa, Janice is afraid to press the issue or seek legal assistance.

Despite the widespread discouragement of this practice, it still pops up in unexpected places, ranging from divorces to workers’ compensation cases and medical malpractice suits. Although hope may spring eternal for these attorneys and clients, the fact remains that the civil adjudicative process exists to help settle public disputes, while the criminal justice process is specifically designed for the protection of society — in most civil cases, society as a whole is not placed in jeopardy, and as such, the threat of criminal charges is not only unethical, but wholly irrelevant.  If such a threat is made to you by or through an attorney, contact the local bar association and report the behavior immediately, and the offending lawyer will be disciplined.

At Moebes Law, we believe in getting you the compensation you deserve. If you or a loved one has been injured on the job, contact Atlanta’s leading workers’ compensation firm at (404) 354-5432 for a free consultation today.

Are assessed attorney’s fees awards often affirmed by Georgia higher courts?

Well, yes.  And here’s an example…

On October 26, 2010, Martha Ayers was injured on the job. Immediately after the injury, Ms. Ayers officially reported its occurrence. The next day, her employer, Heritage Healthcare of Toccoa, fired her unceremoniously and denied her request for disability benefits. Undeterred, Ms. Ayers went on to file a request for a hearing, requesting income and medical benefits in addition to late payment penalties, assessed attorney’s fees, and litigation expenses.

Surprisingly, Heritage Healthcare of Toccoa didn’t put up a fight. On March 11, 2011, Heritage Healthcare’s third party compensation carrier paid Ms. Ayers in full for twenty weeks of past due benefits, then proceeded to deliver weekly benefits according to her request. On September 27, 2011, Ms. Ayers’ former employer went on to pay a lump sum as compensation for the late penalties owed on the March 11, 2011 payment.

Now, it might seem as though Heritage Healthcare of Toccoa was playing by the rules, but they’d forgotten one not-so-small detail. In addition to paying Ms. Ayers income and medical benefits and any late payment penalties owed, Heritage Healthcare had also tacitly agreed to shell out the money for assessed attorney’s fees and the expenses of litigation–fees that could have been avoided by treating Ms. Ayers with the respect and care she deserved.

On September 29, 2011, the final hearing for Ms. Ayers’ case for assessed attorney’s fees was held. The State Board ruled that Martha Ayers’ claim was valid, and that because Heritage Healthcare of Toccoa hadn’t argued the late payment penalty, they were also responsible for paying all assessed attorney’s fees on those late funds.

So, what lesson can be learned from the Georgia Court of Appeals’ decision to uphold the right to assessed attorney’s fees on past due indemnity benefits, late payments, and future indemnity benefits? When an employee reports a workplace injury, do the right thing…the first  time.

At Moebes Law, we’re committed to protecting your rights and your health. If you’ve been injured on the job, contact Atlanta’s leading workers’ compensation lawyers at (404) 354-5432 for a free consultation.

Can a Georgia workers’ comp claimant pursue late penalties that are 10 years past due?

Meet Michael Reid, an employee of the Metropolitan Atlanta Rapid Transit Authority (MARTA). In October 1999, Reid was injured on the job. He played by the rules and filed a claim within the designated time period, and for his trouble, was awarded temporary total disability (TTD) payments–32 of them, to be exact. Of those 32 payments, 12 were ruled untimely or late, making MARTA subject to a 15% penalty paid in full to Mr. Reid.

martaUpon returning to work in June 2002, Reid stopped receiving TTD payments, despite the fact that he was owed statutory penalties on all late payments–a small detail that MARTA happily overlooked. In May 2010, Reid decided that it was time to call in his debts. His attorney sent a polite letter to MARTA, reminding them of their previous oversight, and requesting that they honor the initial agreement.

As you might have guessed, MARTA declined Reid’s request, noting that the two-year statute of limitations had expired years ago. The administrative judge reviewing the case seconded MARTA’s motion, ruling that a request for long overdue statutory penalties constituted a “change in condition,” and that Reid was seeking “additional benefits.”

So, as long as a workers’ comp insurer ignores its obligation to pay late penalties for long enough, it’s in the clear?

Does an employer’s blatant violation of statutory regulations governing when payments are due and utter disregard for the penalties resulting from said violation constitute a change in the employee’s “condition”? No, according to the Georgia Court of Appeals, as it reversed the lower court’s decision.

Although Reid’s delayed request for statutory penalties may open Pandora’s Box, the fact remains that MARTA’s only real defense comes from a troubling loophole in Georgia Workers’ Compensation statutes. After all, late fees do not cease to exist simply because we decide not to pay them. And, as noted by Michael Reid’s attorney, a mangled reading of the existing legislature will only perpetuate the problem.  I would expect that this case will ultimately be heard by the Georgia Supreme Court.  Should that occur, we’ll know for sure whether statutory penalties are subject to the “change in condition” statute of limitations, but for now, the answer appears to be “no.”

At Moebes Law, we believe that our judicial system is only as good the people who uphold it. If you or your family has been injured on the job or denied claim benefits that are rightfully yours, contact Atlanta’s leading workers’ compensation firm at (404) 354-5432 for a free consultation today.

How a Workers’ Compensation Adjuster’s Intentional Delays Killed a Man

How many times could a company with a homegrown, wholesome name like Ralph’s Grocery Co. turn a blind eye to the medical needs of an injured employee? According to the California Workers’ Compensation Appeals board, 11 is the lucky number.

Sedgwick-CMSThe trouble began in December 2003, when Charles Romano sustained an injury to his left shoulder and cervical spine while stocking the shelves of Ralph’s Grocery Co. in Camarillo, California. Two years after the initial injury, Romano finally received the authorization required to proceed with surgery. Romano’s shoulder was healed, but he contracted a serious staph infection as a result of the procedure. Once healthy and hardy, Romano suffered both pulmonary and renal failure, followed by partial paralysis.

And what did Ralph’s Grocery Co. and its third party claims adjuster do once they realized that Romano had contracted an antibiotic-resistant staph infection, more commonly known as MRSA? As Romano suffered from this debilitating, multi-system illness, Sedgwick CMS delayed eleven requests for authorization and reimbursement.

But wait–it gets worse. Not only did Sedgwick CMS fail to deliver fair reimbursement in a timely fashion, they also ignored a judge’s direct order to provide Romano with the intensive care that he needed until his medical bills had reached a grand total of $24,000 a day.

Charles Romano was 47 years old when he died from cardiorespiratory arrest, respiratory failure, and pneumonia resulting from an untreated MRSA infection. In the years prior to his death, Romano was treated at five separate facilities; Sedgwick CMS either delayed or refused to pay any of the accompanying medical costs, even after Romano was awarded further medical treatment by the California Workers’ Compensation Appeals Board. This appalling conduct continued up until Romano’s death, when Sedgwick CMS denied authorization for his final stay at Community Memorial Hospital.

Perhaps most distressing is the fact that Sedgwick CMS contends that they cannot be penalized for eleven instances of “unreasonable delay” because the applicant is now deceased. This attitude certainly conflicts with the heartfelt, apologetic statement made in response to the threat of prosecution.

After the untimely death of Ralph’s Grocery Co. employee Charles Romano, friends and family have rallied to his cause. In June 2013, longtime friend Sid Freeman joined forces with several members of the Central Coast Chapter of the California Applicant Attorney Association. After going public with a brief news conference, Freeman went on to file a letter with District Attorney Greg Totten pushing for the criminal prosecution of the third party claims administer Sedgwick CMS.

At Moebes Law, we are outraged by this blatant disregard for employee health and welfare. If you suffer from a workplace injury, don’t let your case get swept under the rug — contact us for a free consultation today.

What shoud I do if sustain an injury at my job in Georgia?

If you have never experienced an on-the-job injury before, you should be aware of what to do before an incident, so that you are able to protect your rights should something occur. I’ve put together a short (but important!) list of things Georgia employees should know:

Take Notes
You should do this quickly, while events are still fresh in your mind. Jot down significant details like the time, the surroundings, the names of any witnesses, any details that led to your accident, and how the accident occurred. If company safety or equipment violations are at play, be sure to note those as well. Alternately –and since we live in a tech-friendly world– you could make a brief video or voice recording of your recollections about the incident (if you choose to do this, however, don’t surrender this to anyone; it should only exist as a point of reference for yourself).

Report It
If your injury is not life-threatening, you need to report it to your immediate supervisor or union representative immediately. There are forms they are required to file, and they will need to take a report about what happened to cause your injury.

If your injuries are life-threatening, go to the closest emergency room right away. When you are doing hospital paperwork, be sure to tell the staff that your injury occurred in the workplace. They have special procedures in place for workers’ compensation injuries.

Seek Treatment
When dealing with a workplace injury, you need to be seen in an E.R. or by a company-approved workers’ comp doctor, depending on the severity of your injury and the immediacy of your need for care.

If your injury is severe, you should report to an emergency room, and notify your supervisor as soon afterward as you are able to do so. If your injury is not severe, your employer will refer you to a workers’ compensation doctor. You must see the provider you are referred to.

Get Documentation
Get a copy of all documents you sign and forms you fill out in relation to your injury. Keep them together in a safe place in case you need them for reference later on. Keep records on-hand of every appointment and prescription.

Follow Instructions
This is one instance where you do not want to be a rebel. You need to follow the doctor’s instructions to the letter. If you are told to stay out of work, stay out of work. If you are told to report to work, report to work. Do not miss scheduled appointments with doctors or therapists. Take any medications prescribed to you according to physician instructions. Do your physical therapy faithfully, and limit activities as directed. This can all be summed up by the phrase– “Be a good patient!”

Say No
If your workers’ compensation doctor requires you to stay out of work or orders that you can only perform light duty tasks on the job, it is against the law for an employer to threaten your employment or potential disability benefits. They cannot legally use your workplace injury to discriminate against you. Refuse anything that goes against doctor’s orders. You have the law on your side, no matter what your employer says.

Get Legal Counsel
Every injured Georgia worker can benefit from a consultation with an experienced workers’ compensation attorney. Atlanta workers’ comp lawyers from Moebes Law, LLC are well-versed in Georgia law and can assist you in determining your best course of action with regard to your disability benefits. They work closely with a team of respected Georgia medical professionals to ensure the highest quality of care for their workers’ compensation clients.

While I hope that you never have to put these tips to use, please bookmark them and review them periodically so that you are prepared.

Can exotic dancers get workers’ compensation benefits in Georgia?

Dancers in the adult entertainment industry are almost guaranteed to be classified by their employers as independent contractors for both tax purposes and workers’ compensation in Georgia. However, just because your boss tells you your injury does not qualify for workers’ comp–because you’re an independent contractor — doesn’t meant it’s true. Sometimes — and I’m sure this is hard for many people to fathom — business owners lie in order to avoid a possible increase in insurance premiums!

pole dancer.jpg

With this particular legal issue, the key component to analyze is the degree of control exerted over the supposed employee by the employer.  In order to gauge the level of control, several questions should be asked to figure out whether a “strip club” entertainer would qualify for workers’ comp if injured at work during a performance.  In a case I recently handled, we analyzed the factors laid out in a local (and fairly recent) federal court decision regarding whether nude dancers from the Onyx Club in Atlanta qualified as employees or independent contractors.  A few are analyzed below.

At most strip clubs, a “house mom” has a great deal of control over the dancers.  For example, she may control what the dancer wears (or doesn’t wear), her makeup, her hair, her shoes, her level of coherence (or intoxication), her hours, her song(s) played, her stage (assuming multiple stages), her VIP clientele, etc.  The club may also require splitting of tips with the DJ, bartenders, and other “house” expenses.  Her stage name may be dictated by the club.  Perhaps financial penalties are imposed for not coming to work during slow shift or when otherwise scheduled.

More than likely, there are several other posted rules and regulations that govern the behavior of the entertainers at a nightclub and make them appear more as employees than as independent contractors.  Violators of such rules can be disciplined, to include suspension or termination.

Again, the key issue to analyze is the level of control exerted over the would-be employees.  While several industries are known to use independent contractors instead of employees, I’ve found that strip clubs seem to work the hardest to so classify their employees when, in all actuality, they put quite a bit of control over those who perform within their hallowed halls.  Think you might have a case against your nightclub employer?  Feel free to call our Atlanta law firm for a free consultation and analysis.  You might be surprised to learn your options aren’t as limited as you’ve been told.