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Bartender Busted for Bilking the NY Workers’ Compensation System

An Upstate New York bartender must pay almost $25,000 in restitution after he pleaded guilty to workers’ compensation fraud.
Investigators said that 57-year-old James Hooks consistently told an insurance company that a 1994 workplace injury at a grocery store left him unable to work. However, state officials eventually determined that Hooks had been working as an Elmira bartender since at least 2013. In the wake of the workers’ comp fraud case, NY Inspector General Leahy Scott vowed that he would “relentlessly pursue anyone who steals from the workers’ compensation system for their own corrupt financial benefit.”
As part of the guilty plea entered in Chemung County Court, Hooks must also serve five years’ probation.
Workers’ Compensation Benefits in New York
The truth is that the total amount of workers’ compensation that Hooks received, $25,000, simply isn’t that much when spread out over three years. That’s especially true for someone who is unable to work.
New York is not the only place that has been hit by benefits cuts. In Florida, average workers’ compensation benefits have been slashed by more than 30 percent since 2010. As a matter of fact, things are so bad in the Sunshine State that workers have challenged the system itself, recently telling a court that the no-fault insurance system is no longer a reasonable alternative to a tort-based system.
These reductions in workers’ comp benefits mean that injured workers often need lawyers who are both aggressive advocates and skilled negotiators.
NYC Workers’ Compensation Fraud
Incidents like the one described above nearly always get widespread media attention, in addition to a dose of “shame on you” commentary. But the reality is that only about one percent of workers’ compensation claims are fraudulent.
Employer fraud is much more pervasive. Employer fraud is also a far greater drain on the workers’ compensation system. Some common workers’ comp schemes utilized by fraudulent employers include:

  • Illegal Payments: Some employers will promise to pay an injured worker’s medical bills under the table if the employee promises not to file a workers’ compensation claim. Even if the boss follows through on that promise, which is a big “if,” the worker loses because there is less money available to pay benefits.
  • Misclassification: Many companies, even some large ones, officially have zero “employees” because they fraudulently classify their workers as “independent contractors” in order to avoid required insurance premium payments. When these workers are injured on the job, they are ineligible for compensation.
  • False Reports: Many companies intentionally file false statistical reports with the Workers’ Compensation Board because they know that the chances of getting caught are slim and the penalties for this conduct are usually light.

The prevalence of employer fraud underscores the need for workers to have assertive attorneys. Despite what your company may say publicly, they probably want to pay you as little as possible when you are injured.

Fraud and reduced benefits make a complicated workers’ compensation system even more complex. For a free consultation with an attorney who is committed to helping injured workers, contact Proner & Proner today. Home and hospital visits in New York and elsewhere are available.

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