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Washington Business Owner Gets Prison Time for Disability, Workers' Comp Fraud

Washington Business Owner Gets Prison Time for Disability, Workers' Comp Fraud

A Stanwood, Wash., business owner who made the mistake of feuding with relatives must spend a year in prison for a scam that defrauded state and federal disability programs and his union of nearly $300,000.

Richard Stalkfleet claimed to be disabled and unable to work since 2002, telling authorities his only daily activities consisted of eating, having coffee, playing with his dog and doing “a little housework.”  During that time, Stalkfleet collected a total of approximately $3,000 a month from the Teamsters Pension Trust, Social Security Administration and Washington State Department of Labor and Industries.

Stalkfleet, 66, of Stanwood, Wash., collected more than $295,000 in disability and pension benefits for eight years while running a wood chip distribution company that earned more than a half-million dollars annually.

At sentencing, U.S. District Judge Ricardo S. Martinez said Stalkfleet “victimized programs specifically designed to help the most needy. . . the very programs that don’t have sufficient funds to help the disabled.”

According to records filed in the case, Stalkfleet started a business known as Stalkfleet Farms in approximately 2000 and put the business in his stepson’s name. The company collected wood shavings from lumber mills and distributed them to dairy farms for use in barns, and was quite profitable.  

Between November 2004 and November 2011, Stalkfleet Farms averaged monthly revenues of $43,000 and annual revenues of $516,000. The profits went right into Stalkfleet’s bank account. At the same time as he was running the successful business, Stalkfleet claimed to be disabled and unable to work.

Stalkfleet fraudulently collected disability benefits between November 2004 and January 2013.  As a result of his fraudulent claims, he collected $134,883 in workers’ compensation benefits, $91,831 in SSA benefits and $69,188 in Teamsters Pension Plan benefits for a total loss of $295,902.  The fraud was uncovered in 2011 when Stalkfleet had a falling out with his stepson and the stepson’s wife.

Washington State Department of Labor & Industries investigators played a major role in uncovering Stalkfleet’s activities. They conducted surveillance of Stalkfleet, and found him working and driving trucks while receiving Social Security Disability, workers’ compensation and Teamster Pension Plan benefits.

Investigators interviewed more than 10 of Stalkfleet Farms’s customers. All of them thought of Stalkfleet as the business’s true owner and their point of contact.

In asking for a prison sentence, prosecutors highlighted the length of the fraud and the fact that Stalkfleet was not struggling financially, while he took advantage of programs that are essential for the disabled.  

“Each of the programs defendant defrauded is a pool of limited resources intended to support disabled workers who cannot support themselves. But over the same years defendant took in millions of dollars in business revenues at Stalkfleet Farms, he drained almost $300,000 set aside for those unable to work,” prosecutors wrote in their sentencing memo.

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