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June 2004

State: New York

Area of Interest: Manhattan Woman Arrested in $262,000 Insurance Fraud Scam

Superintendent of Insurance Gregory V. Serio and Manhattan District Attorney Robert M. Morgenthau today announced the arrest and indictment of a Manhattan resident for attempting to collect $262,000 in an insurance fraud scam. Antoinette Millard has been charged with Insurance Fraud in the Second Degree, Attempted Grand Larceny in the Second Degree, and Criminal Possession of a Forged Instrument in the Second Degree.

An investigation leading to today's indictment revealed that on October 16, 2003, Ms. Millard obtained insurance from the Chubb Insurance Company for jewelry valued at $492,000. She claimed she had inherited the property from her deceased mother, and insured items included diamond bracelets, rings, and stud earrings made by Bulgari, Cellini, Van Cleef & Arpels, and Erica Courtney. The defendant provided Chubb with various bills of sale and appraisal forms in order to prove the worth of the items.

Ms. Millard initially received "in vault" coverage on the jewelry, which provided coverage only when the items were kept in the safe deposit box at her bank. However, on October 27, 2003, the defendant requested and obtained "out of vault" coverage, which allowed her to remove the jewelry from the bank vault for a restricted period of time with insurance. On this day Ms. Millard removed 23 pieces of jewelry from the vault, left the bank and claimed she was mugged by an unknown assailant.

The defendant reported the incident to the New York Police Department and filed a claim with Chubb stating that $262,000 worth of jewelry was stolen. The insurer made follow up inquiries and notified the Frauds Bureau of the New York State Insurance Department. The investigation was referred to the Manhattan District Attorney's Office.

The subsequent investigation revealed that one of the appraisal forms Ms. Millard submitted was forged, and that one month prior obtaining the insurance policy she actually sold 12 of the 23 items that she claimed were stolen.

Source: State of New York

Area of Interest: Ergonomics Guidelines Announced for Retail Grocery Storesa

OSHA Administrator John Henshaw today announced the release of industry-specific guidelines for the prevention of musculoskeletal disorders (MSDs) in grocery stores. OSHA's Guidelines for Retail Grocery Stores provide practical recommendations to help grocery store employers and employees reduce the number and severity of injuries in their workplaces.

These voluntary guidelines are intended to build upon the progress that the grocery store industry has made in addressing the causes of these injuries.

The guidelines emphasize various solutions that have been implemented by grocery stores across the country and have been effective in reducing work-related injuries and illnesses. An "Implementing Solutions" section offers examples of ergonomic solutions that may be used to control exposure to ergonomic risk factors in grocery stores. The section includes corrective actions, including checkout, shelf stocking, bakery, produce and meat departments.

Source: Occupational Safety and Health Administration

Area of Interest: OSHA Cites Pipeline Company for Trenching Hazards at Ocilla, Ga., Job Site, Agency Proposes Penalties Totaling $115,500

The U.S. Labor Department's Occupational Safety and Health Administration (OSHA) has cited and proposed monetary penalties against Wynn Brothers Inc. for exposing workers to trenching hazards at an Ocilla construction site.

OSHA began an inspection Jan. 15 after an inspector observed workers installing pipelines in a 13-foot-deep, improperly shored trench on Fitzgerald Highway. The agency has a national emphasis program that allows immediate inspection of a site when trenching hazards are observed.

The Ocilla-based company was cited for two alleged willful violations, with proposed penalties of $87,500, for failing to properly shore trench walls, provide a trench box system, and provide workers with a safe means of entering and exiting the trench.

The company was also cited for one alleged repeat violation, with a proposed penalty of $24,500, for failing to place excavated soil at least two feet away from the trench edge, which added to the danger of a cave-in. Wynn Brothers had been cited in January 2002 for a similar violation.

Additionally, the company was cited for two alleged serious violations, with proposed penalties totaling $3,500, for failing to provide workers with hard hats and trench-safety training. A serious violation is one in which there is a substantial probability that death or serious physical harm could result and the employer knew or should have known of the hazard.

Source: Occupational Safety and Health Administration

State: New York

Area of Interest: Otsego County Woman Arrested for Workers Compensation Fraud

Superintendent of Insurance Gregory V. Serio today announced the arrest of a Schenevus woman for defrauding the Workers' Compensation system out of more than $23,000. It is alleged that Marie Banks, 41, wrongfully collected benefits while she worked as a home health aide even though she claimed to be physically unable to work.

Ms. Banks began collecting benefits after suffering injuries to her left arm and neck in May 1994 while working as a residential counselor at the Upstate Home for Children. She claimed that she was physically unable to work. However, an investigation revealed that, beginning in December 2002, Ms. Banks worked at the Resource Center for Independent Living in Utica. She continued to receive $10,338 in benefits, and an additional $13,050 in physical rehabilitation reimbursements. The investigation found that she did not incur these rehabilitation costs.

The investigation was led by the Department's Insurance Frauds Bureau, working with the New York State Insurance Fund, Division of Confidential Investigations. Criminal prosecution is being conducted by Otsego County District Attorney John Muehl. The Otsego County Sheriff's Department assisted by processing the arrest.

Ms. Banks surrendered herself today and was arraigned in the Town of Maryland before Town Justice Joseph L. Staruck. She was released on her own recognizance and ordered to reappear at the Court on Tuesday, June 8, 2004. Ms. Banks is being charged with Insurance Fraud in the Third Degree, Grand Larceny in the third degree, and Workers Compensation Fraud. She faces up to 7 years in prison

Source: State of New York

State: Florida

Area of Interest: Towing Contractor Arrested for Worker's Compensation Fraud

The owner of a towing company with local government contracts has been charged with failing to provide workers' compensation for his employees, according to Chief Financial Officer Tom Gallagher.

Investigators with the department's Division of Insurance Fraud say Michael Mucha, 41, of 14761 Madison Place in Davie, and owner of Bob's Towing Inc., failed to provide required workers' compensation coverage for his employees, including at least 20 drivers.  Mucha allegedly provided a fraudulent certificate of coverage to Town of Davie employees, with which the company had a contract for services.  The Davie municipal employees then contacted the Davie Police Department.

State insurance fraud investigators were contacted to assist, and Michael Mucha was arrested and charged with two counts of workers' compensation fraud.  Mucha was booked into the Broward County jail.  If convicted, Mucha faces up to ten years in prison.

Under Florida law, employers in non-agriculture or construction-related industries, who have four or more employees, must maintain workers' compensation coverage for their employees. 

Source: State of Florida

State: California

Area of Interest: Insurance Commissioner Garamendi Adopts 20.9% Decrease In Workers' Compensation Pure Premium Rates – Calls for Insurers to Pass Savings Along to Employers

Insurance Commissioner John Garamendi on Friday announced his decision to lower the advisory pure premium rate for workers' compensation insurance in California by 20.9%, a clear signal that substantial savings from system reform are available to provide relief to employers currently paying the highest premiums in the nation.

The recommendation from the Commissioner represents the impact of the estimated $5.5 billion in savings from last year's reform, AB 227 and SB 228, as well as the impact of this year's reform, SB 899, estimated to save $2.25 billion. A substantial portion of the SB 899 savings can be attributed to cleanup of AB 227 and SB 228.

Commissioner Garamendi's ruling, which insurers are not bound to follow but use as a benchmark, will impact policies issued or renewed on and after July 1, meaning that savings could have a significant impact on employer premiums for many businesses this year.

The Commissioner made the announcement of his pure premium advisory rate at A-1 Door & Business Solutions in Sacramento. Employers such as Chief Executive Officer Jeffery Wilson have seen their premium rates skyrocket over the past several years primarily due to out of control medical costs and general system dysfunction.

Commissioner Garamendi made workers' compensation reform his top priority upon taking office in January 2003, immediately focusing attention on the escalating medical costs. Reforms based largely on his roadmap instituted treatment guidelines and established rules that helped rein in the rising cost.              

Source: State of California

Area of Interest: OSHA Accepting Comments on Site-Specific Targeting Program

OSHA is seeking public comment until July 6, 2004 on its Site-Specific Targeting (SST) inspection program to determine more accurately how the program is accomplishing its goal of targeting the nation's most hazardous workplaces for inspection.

The SST program, first implemented in 1999, uses data from the OSHA Data Initiative survey to focus the Agency's resources on outreach, consultations, technical assistance and target workplaces that have reported high injury and illness rates. Establishments selected under the SST program receive both a comprehensive safety and a comprehensive health inspection.

OSHA is requesting suggestions that can help improve the SST program, as well as information on how the program is perceived by workers and employers. Specifically, the Agency is seeking comments on the following questions:

• Are the LWDII/DART rate and the DAFWII case rate appropriate measurement tools for the SST?
• Should OSHA consider other measures for injuries and illnesses at individual establishments? If yes, what measures should be considered?
• Should OSHA be looking at injury and illness data over multiple years rather than in a single year?
• Should an establishment's priority for inspection take into account whether the establishment is in an industry with a high rate or a low rate of citations?
• Should the SST include additional focuses such as specific industries, or past citation history?
• Are there particular areas/hazards OSHA should be focusing its enforcement efforts on?

Source: Occupational Safety and Health Administration

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