California Commissioner Awards $34.9M to Fight Workers’ Comp Fraud

By: Andrew Polk
October 13, 2016

California Insurance Commissioner Dave Jones today announced he has awarded $34.9 million in grants to 37 district attorney offices representing 44 counties across California to combat workers’ compensation insurance fraud.

The grants, funded through employer assessments, support law enforcement efforts in investigating and prosecuting workers’ compensation insurance fraud.

Grant funding is based on assessments from California insured and self-insured employers, and district attorneys apply for workers’ comp fraud grant funds.

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New laws toughen up penalties for labor law violations

Published Thursday, July 7th 2016

HONOLULU (HawaiiNewsNow) –
Hawaii employers who fail to comply with state labor laws will face stricter penalties, under new measures signed into law July 1.

Gov. David Ige signed the laws, increasing the penalties violations of requirements for workers’ compensation insurance, temporary disability insurance and for breaking prevailing wage laws on public construction projects.

In Nov. 2015, an investigation by the Labor Department found dozens of contractors and subcontractors working at the Ala Moana Center’s new Ewa wing violated labor laws by not necessary taxes.

Furthermore, the department found a number of construction firms also failed to pay pre-paid health insurance and temporary disability insurance for their workers.

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Judge blocks Bevin’s executive order abolishing commission

JUNE 8, 2016 5:09 PM
The Associated Press

FRANKFORT, Ky. (AP) – A Kentucky judge has issued a temporary injunction blocking Gov. Matt Bevin’s executive order that abolished the Workers’ Compensation Nominating Commission and recreated a new one.

The Lexington Herald-Leader reports Franklin Circuit Judge Phillip Shepherd issued the order Wednesday and said it will remain in effect until he issues a final ruling.

Bevin’s press secretary, Amanda Stamper, said the governor’s office believes the ruling is wrong and is considering legal options, including possible appeal.

The commission nominates administrative law judges to be appointed by the governor and who decide if and how much employers have to pay workers who were hurt on the job. Last month Bevin abolished that commission, rewrote the law that governed it and then re-created it with new members, all by executive order.

Two labor unions and four injured workers filed a lawsuit challenging the move.

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Case # 16CF0765
Date: April 13, 2016

SANTA ANA, Calif. – Five defendants were arraigned yesterday April 12, 2016, for committing over $635,000 in tax and insurance fraud and failing to pay employees prevailing wage on public works contracts. Babak Brian Abghari, 36, Newport Coast, Homayoun Harry Abghari, 57, Huntington Beach, Julio Roberto Alvarado, 47, San Pedro, Cody Lawson, 34, Long Beach, Phyllis Martinez, 51, Anaheim, are each charged with eight felony counts of taking and receiving a portion of a worker’s wage on a public work, 56 felony counts of recording a false or forged instrument, six felony counts of making a false statement to discourage an injured worker from claiming benefits, and seven felony counts of willful failure to pay taxes, with sentencing enhancement allegations for property loss over $200,000. Babak Aghari and Homayoun Aghari are also charged with three felony counts of misrepresenting facts to a workers’ compensation insurance company. If convicted, the defendants face a maximum sentence of 49 years and six months in state prison. The defendants are scheduled for a pre-trial hearing on May 12, 2016, at 8:30 a.m. in Department C-55, Central Justice Center, Santa Ana.

Houmayoun Abghari and Babak Abghari are accused of owning and operating PCN3, a general contracting company that mainly conducts public works projects.

Between Jan. 1, 2000, and March 30, 2015, the defendants are accused of fraudulently paying PCN3’s employees less than the prevailing wage in cash, and keeping the extra money owed to their employees. The defendants are accused of “shorting” the victims’ hours on certified payroll reports and/or requiring their victims’ to give cash back.

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Some contractors avoid workers’ comp to win low construction bids

Reported by Demetria Kalodimos
Posted: Feb 17, 2016 7:18 PM EST Updated: Feb 17, 2016 10:31 PM EST

The amount of growth in downtown Nashville requires a lot of labor, but not every worker is equally protected in case of injury.

The practice of winning low bids by avoiding workers’ compensation payments is called worker misclassification.

The Channel 4 I-Team has found the same thing uncovered nearly five years ago at the Music City Center is now happening right across the street.

In 2011, a drywall subcontractor with a large workforce was failing to deduct taxes of any kind or pay workers’ compensation or overtime.

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RI 6-Agency Task Force Announces Establishment of Anonymous Tip Line for Allegations of Misclassification of Workers as Independent Contractors Instead of as Employees


Providence, RI ( – A six-agency task force established to protect both workers’ rights and law-abiding businesses that classify their employees properly announced today that it has set up an anonymous telephone tip line for allegations of misclassification.

Staffed by the Rhode Island Division of Taxation, the tip line number is 401-574-8477. Also, the task force is currently building a website to allow people to post tips online.

The chairman of the Joint Task Force on the Underground Economy and Employee Misclassification, DLT Director Charles J. Fogarty, and RI Tax Administrator David M. Sullivan also announced that their agencies have been meeting regularly to share information since the task force came into being in June with the enactment of the Fiscal Year 2015 State Budget. The panel’s purpose is to:

  • coordinate joint efforts to combat fraudulent employment activities;
  • foster voluntary compliance with the law by educating workers and employers;
  • protect the health, safety and benefit rights of workers; and
  • protect law-abiding businesses from being undercut by companies that skirt the law. If warranted, an investigation may be referred to the Office of Attorney General.


“One of our major goals is educating, not violating, Rhode Island companies that might unknowingly be misclassifying their workers,” Fogarty said. “At the same time, however, fighting misclassification is an important strategy to promoting shared prosperity in our state

Feds join N.H. worker misclassification efforts

Published: November 17, 2014

The federal government is getting involved in helping New Hampshire in its enforcement efforts against misclassification of independent contractors, especially when it relates to workers’ compensation.

New Hampshire last week became the 15th state to join the federal Labor Department’s misclassification initiative; Massachusetts followed suit on Monday.

“Misclassification of workers steals benefits and protections from employees and allows unfair advantages to businesses that do it,” said New Hampshire Labor Commissioner James W. Craig. “This agreement will help us grow our state and regional economy by leveling the playing field for honest and law-abiding employers.”

New Hampshire has grappled with the murky world of independent contractor classification for decades. Definitions change depending on the law involved, and enforcement is uneven.

The state Department of Employment Security, for instance, has found misclassification in nearly a quarter of the audits it conducts. But the state Department of Labor only has fined a fraction of those fined by the Employment Security and has drastically reduced most of the fines imposed.

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Tennessee OSHA & Workers’ Comp Join Forces to Educate Employers on New Reform Bill

NASHVILLE – The Tennessee Department of Labor & Workforce Development announces a series of seminars across the state explaining the Workers’ Compensation Reform Act of 2013. The Workers’ Compensation division and TOSHA will team up with the Tennessee Chamber of Commerce to deliver these seminars to educate and inform employers about the impact of the bill, including ways to avoid workplace injuries and to better handle them if they occur.


The information shared will be valuable to business owners, managers, HR professionals, and anyone involved in the administration of workers’ compensation claims.

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