Federal Tax Case Leads to Workers Comp Fraud Arrest

The fraud investigation of Rosa Rivera, 66, of the Bronx began when the New York State Insurance Fund learned that Ms. Rivera had been charged by federal authorities with filing false tax returns for clients of her tax preparation service.

A closer look revealed that Rosa Rivera had been working as a self-employed tax preparer from 2004 to October of 2009 while receiving workers’ compensation payments of $400 weekly from NYSIF and during that time signed forms submitted to NYSIF stating that she was not employed.

Rivera had been receiving workers’ compensation benefits since 2002 after reporting a work-related injury to her knee while employed as a bookkeeper. In September, 2010 Ms. Rivera pleaded guilty in federal court to a charge of filing false income tax returns for various clients, placed on two years probation and ordered to pay $152,000 in restitution.

A joint investigation by NYSIF’s Division of Confidential Investigations, the New York State Insurance Department’s Fraud Bureau and the Suffolk County Insurance Crimes Unit led to Rivera’s arrest earlier this month for workers’ compensation insurance fraud, as a felony. The amount of the alleged fraud against NYSIF totals $135,000 so far, with a potential future loss of $200,000 had the fraud not been discovered.

The workers’ compensation fraud case against Rivera is being prosecuted in Suffolk County because the medical case management required for Ms. Rivera was provided by NYSIF’s Suffolk District Office.

Criminal complaints and indictments are accusations only. Defendants are presumed innocent until proven guilty.

NYSIF, created as part of the Workers’ Compensation Law of 1914, is New York’s largest workers’ compensation insurance carrier By law, NYSIF is a competitive insurance carrier that sells workers’ compensation and disability benefits insurance to any employer doing business in New York State. Approximately 175,000 employers hold NYSIF workers’ compensation policies constituting about 31 percent of the market, while 61,000 employers maintain active disability benefits policies.

 

<!– @font-face { font-family: “Cambria”; }@font-face { font-family: “MinionPro-BoldIt”; }p.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0cm 0cm 10pt; font-size: 12pt; font-family: “Times New Roman”; }div.Section1 { page: Section1; } –> NYIA Calls for “Relief”

ALBANY, N.Y.—The New York Insurance Association (NYIA) has called for relief to New York City’s courts that are suffering from the mounting problems with the state’s broken no-fault auto accident laws. The New York City Civil Court recently announced the creation of a specific no-fault division to be able to manage an onslaught of no-fault insurance claim cases.

The court reports that in the past 10 years civil caseload has increased 153 percent statewide and 170 percent in the New York City, pointing out that a major culprit is an a influx of no-fault cases. There were 200,000 no-fault filings in 2009 alone. The information is detailed in the State of New York 2011-12 Judiciary Budget.

“It’s clear that New York City’s court system is overloaded with no-fault auto accident cases,” Ellen Melchionni, president of NYIA said. “Public policymakers need to act in 2011 to create meaningful changes to the laws and decrease the number of cases to a manageable number “Taxyers are being forced to pay for lawsuits that are often frivolous,” she said.

“Making the needed changes to New York’s no-fault law would save New Yorkers who financially support the court system. Every penny counts as the state attempts to close the $10 billion, and ever-growing, deficit.” Nearly half of no-fault claims result in litigation. Cases are rarely pursued by an individual. In fact, more than 99 percent of cases were filed on behalf of medical providers, not those who were involved in an auto accident.

The court recognizes that a major contributor to the growth in the number of lawsuits is changes in New York’s laws that require insurance companies to pay or deny a claim within 30 days. If the claim is not paid or denied within this timeframe, medical providers can file individual lawsuits for each bill. In some instances, this strict 30-day rule does not provide insurers with the adequate time to determine whether or not a claim is fraudulent.

“One simple fix would be giving companies the necessary time to ferret out fraud, which has been estimated to cost New York drivers $628,000 a day,” she said. “Given the clear defects in the laws, the time for change is now. Reforms to the no-fault system would benefit all New Yorkers.