California Collects $550,000 in Workers' Compensation Case

California's State Compensation Insurance Fund collected $550,000 as the first installment of a total $677,693.00 owed to the fund from a Los Angeles business owner who pleaded no contest to felony workers' compensation insurance fraud.

Randy Greenberg owned a Los Angeles-based picture framing business. The State Fund insured Greenberg from 1998 to 2001. A State Fund audit revealed that Greenberg used various fraudulent schemes -- including underreporting of payroll, falsifying job classifications and creating "shell corporations" -- to avoid paying proper workers' compensation insurance premium.

On Nov. 29, Judge David Horwitz of the Los Angeles County Superior Court placed Greenberg on 5 years' formal probation as a result of his guilty pleas to violation of Insurance Code Section 11880 (a), Insurance Code Section 11760 (a) and Penal Code 186.11 (a). If Greenberg violates his probation, he could be sent to state prison for a maximum of 5 years.

As part of his sentence, Greenberg was also ordered to pay an additional $863,000.00 to the Workers' Compensation Fraud Account for investigation cost reimbursement. The investigation was a collaborative effort between the California Department of Insurance, the Los Angeles District Attorney's Office and the State Fund.

"Fraud continues to be a significant factor in high workers' compensation insurance rates for California employers. We hope that Mr. Greenberg's sentence will underscore our resolve to fight fraud to protect the interests of California employers and their injured workers," said Donna Gallagher, manager of the State Fund's Fraud Investigation Program (FIP).

The FIP addresses all aspects of workers' compensation insurance fraud, including employee, employer, medical, legal and internal. In the last decade, State Fund's FIP has resulted in hundreds of arrests and convictions in a wide range of workers' compensation cases, including some considered milestones in California's fight against fraud.

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