Posts Tagged ‘crime’

Annals of Compensability: PT Stands for Pole Therapy?

Monday, May 3rd, 2010

Christina Gamble worked at the family friendly Red Robin restaurant in Quakertown PA. She claimed to have fallen and hurt her back. She quit on the spot and went to work for Target, where she worked for two weeks. She filed a workers comp claim for the restaurant injury, which slowly wended its way through the Pennsylvania system until she was awarded benefits nearly a year after the initial injury. Gamble said she was unable to work because standing and changing positions was difficult. She collected over $20,000 in indemnity.
An anonymous tip sent investigators to C.R. Fanny’s Gentleman’s Club and Sports Bar in Easton, where Gamble worked out the kinks in her back by removing her clothing and writhing around a pole. C.R. Fanny’s (read the name aloud for full effect) is noted for its not-exactly highbrow entertainment such as applesauce and Jello wrestling, along with a “frozen thong contest” that is beyond the descriptive powers of this particular blog.
Gamble has been indicted for two counts of insurance fraud and theft by deception. She told investigators that she became an exotic dancer because she and her husband were under enormous financial pressures.
As is so often the case, a number of questions arise:

  • Why was the injury deemed compensable in the first place?
  • With Gamble quitting her job at the restaurant, did anyone at Red Robin or the insurance company pay any attention to this claim?
  • Did Gamble’s doctor attempt to test her physical mobility in any way – for example, using the unorthodox “sliding down the back of a chair” test?
  • Lastly, can Gamble find the proverbial Philadelphia lawyer to take her case, arguing, for example, that pole writhing might indeed be appropriate treatment for a gimpy back and that frozen thongs were an ingenious method of applying ice in the general vicinity of the injured body part?
  • Ms. Gamble should have followed immortal Will Rogers’s advice on gambling: “Don’t gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it.” (I wonder what Will would have thought about AIG…)
    NOTE: Thanks to Pennsylvania reader Rick G. for the heads up on this story.

    Noe Go: Con Man in a Corner

    Tuesday, March 2nd, 2010

    Four years ago (time flies when you’re having fun!) we blogged the saga of Thomas Noe, the power broker who parlayed his relationships with highly-place politicos into lucrative contracts with the Ohio workers comp bureau. The state invested $50 million of comp funds in his coin business. Unfortunately, Noe’s inventory of coins and his tracking of the funds fell short of bookkeeping standards. He was convicted on both federal and state charges. The “Coingate” scandal brought down some heavy hitters, including the governor.
    In an article in the Columbus Dispatch by Mark Niquette and Joe Hallet, Noe outlines his next moves.
    “God has a plan for me, and what I’m going to do (is) I’m going to make the best of my time in Hocking {Correctional Facility],” he says. Much of his time is tied up in his appeal, which is wending its way to the Illinois Supreme Court, where he subliminally hopes the judges remember him fondly: last time around, five of the seven judges removed themselves from a previous case because they had taken campaign contributions from the ever-generous Noe.
    His appeal appears to be based upon a technicality: “Believe me, I’m not sitting here saying I didn’t make mistakes. I made a lot of mistakes. I’m just saying I’m not guilty, in my opinion, of what they said I’m guilty of.”
    To put it mildly, the prosecutors aren’t buying Noe’s claiming of innocence.
    Assistant Lucas County Prosecutor John Weglian says: “He’s a liar.”
    “There isn’t a single embezzler in the history of embezzling, I think, who has not intended to pay the money back,” Weglian said. “They all say that. … He’s a salesman; he’s trying to market himself.” (With all due respect, Mr. Weglian, Bernie Madoff knew all along he was never going to pay people back.)
    Accentuate the Positive
    For the disgraced Noe, the marketing options from a jail cell are clearly limited. But Noe prides himself on being a positive person.
    “I’ve always said a negative thought’s a down payment on failure. I’m not going to fail. I’m not going to fail on the outside. I’m not going to fail as a prisoner.”
    One might argue that Noe’s conviction on multiple charges of corruption was a failure on the outside, and that his prospects for success from the “inside” are remote. But as Noe says, it’s just part of God’s plan – a plan, at the moment, that calls for another decade or so in Hocking. The former high roller used to enjoy steaks and cabernet at the best restaurants in Ohio. His current fare falls rather dramatically short of that standard, but, heck, it’s free and there’s no tipping.
    It would be nice to think that if he ever gets another opportunity to make business decisions on the outside, Noe will have learned how to say “no way” to the Noe Way. I’m not exactly holding my breath.

    Risk Management, Family Style

    Tuesday, February 16th, 2010

    We have been following with increasing amazement the saga of Amy Bishop, the Harvard-educated biology professor who certainly is in touch with her rage, if not much else. She was involved in a year-long conflict with the University of Alabama-Huntsville over tenure. Sometime after receiving the final denial, she calmly taught a class and then attended a faculty meeting with 13 colleagues. Forty-five minutes into the meeting, she took out an unregistered automatic pistol and methodically shot six colleagues in the head, three of whom died. Had her gun not jammed, she might have succeeded in executing the remaining 7 people. After being forced out of the room, she calmly called her husband and asked for a ride home.
    The astonishing part of this story is that she had apparently already committed a cold-blooded murder. In 1986 she killed her younger brother with a blast from a shotgun. In what now wreaks as a coverup, the incident was classified as an accident: she claimed that she was attempting to remove the shells from the shotgun and accidentally drilled her brother. Sounds reasonable, except that she had already discharged the gun in her bedroom – no one in the family heard the blast (just Amy being Amy?). She was, coincidentally, in the middle of an argument with her brother. As we have now all learned, you definitely do not want to get on Amy’s bad side.
    Her mother, claiming to have witnessed the shooting, upheld Amy’s version of the event. Mom, conveniently, was a politically connected official in the local town. Amy was released into the custody of her parents (enjoying, we presume, her new status as an only child). The investigative report ignored the utter implausibility of the entire story: the incoherent sequence of events, Amy’s evident rage, her fleeing the house with the gun and subsequent threatening of people on the street.
    Defending the Indefensible Self
    Here’s the risk management part: Amy’s father bought the shotgun after someone allegedly broke into the house. (There is no mention of any police record of this earlier incident.) Dear old dad kept the shotgun in the bedroom, with the shells conveniently laid out on top of a dresser. Amy, a brilliant scientist, but, she would have us believe, mechanically inept, took down the gun and put in the ammunition. (Why? no one bothered to ask.) She “accidentally” discharged the gun into the ceiling. Oops, how did that happen? Then she carries the gun downstairs and asks for help in unloading it. Her brother walks into the kitchen. The rest, as they say, is history as written by the (cruel) victors.
    Twenty four years later, Amy practices shooting at a firing range. Her husband does not ask where she got the gun or why she wants to learn how to shoot it. He apparently has no clue what she is planning to do. He claims that he is “no psychologist” – and who could possibly argue with that? When he finally gets to talk to his homicidal wife, secure in a jail cell, she asks if the kids have all done their homework. From executing colleagues to worrying about homework. Who could possibly know what is going on in the mind of this brilliant, demented woman? And how could you possibly hold her parents accountable for enabling this monster and letting her loose upon an unsuspecting world?

    California Fraud Bill: The Solution is a Problem

    Wednesday, August 19th, 2009

    California has a California-sized fraud problem, with much of action in the medical arena. Unscrupulous providers are billing for services that are never provided, often under the names of people who have never been injured. It’s identity theft targeted at businesses, not individuals. In California’s $7 billion comp system (down from $21 billion just a few years ago), fraud is a significant cost driver.
    Here is just one example of medical billing fraud, involving the Los Angeles Unified School District. In August of 2006 the district received a bill for lab services involving a principal injured in a fall the previous May. Unfortunately for the perpetrator, one James Wilson, the principal had died prior to the date of the lab test. (Comp is rarely interested in post-mortems.) Wilson was a financial rep at Cedars-Sinai Medical center – a highly reputable institution – and had access to patient medical records. He was convicted on five felony counts and sentenced to 4+ years in prison.
    As we read in the LA Times, a task force of private and public employers, including the Walt Disney Co., came up with an intriguing solution: require insurers to send notices to injured workers to check whether they actually received all the medical services billed. To eliminate the suspense, I will tell you now that the bill died in committee, at the request of the insurance industry. As much as the Insider detests fraud, we’re with the carriers on this one.
    Junk Mail?
    The fraud problem is very real, but this particular solution is flawed. Too many assumptions are embedded in the approach. The bill assumes that:
    – the carrier has a valid address for the individual
    – the individual will read and understand the mailing, which is likely to contain technical information on treatments provided. (The claimant may be non-English speaking and/or illiterate.)
    – the individual will take the time to fill out the form and respond, even though there is no direct incentive to do so
    – the individual is not a willing participant in the fraud (having received a few bucks for the effort)
    The fundamental flaw is that injured workers have no direct financial stake in fraud: they are held harmless in the comp system, with no co-pays, no deductibles and no premiums. The stake holders are the employer, who either pays for insurance or is self-insured, and the carrier/TPA, who under this bill is confronted with the significant cost of mailings (perhaps multiple mailings to individual claimants) and the arduous task of logging responses, which would be random: most would indicate no problems, while those pointing to fraud might well come from folks who simply did not understand the questions. This solution is equivalent to using a shotgun to eliminate a bunch of (very pesky and rather deadly) mosquitoes.
    There may be a quick fix to make this approach somewhat more effective: send the confirmation of services to the employer. That way a vested stake-holder would be given useful information and would have an incentive to follow up on it. The employer could sit down with the individual and verify the treatments. Any problems could be relayed to the carrier. In this approach, the scale of the effort becomes more manageable, as the burden falls on hundreds of thousands of employers, as opposed to a few hundred carrier/TPAs.
    A cost-benefit analysis would probably place this fraud buster where it currently resides, in the circular file. It’s always tempting to legislate solutions to intractable problems, but alas, mandated solutions often become a new set of problems. Administrators, employers and carriers need a variety of tools to tackle fraud. This aborted bill is not exactly what the prudent doctor would have ordered.

    Albania Deleon: Death in the Classroom

    Monday, May 18th, 2009

    Albania Deleon is a entrepreneur. A legal immigrant and naturalized citizen from the Dominican Republic, she founded and operated Environmental Compliance Training (ECT) in Methuen, Massachusetts, the largest asbestos removal training school in New England. Between 2001 and 2007, she trained over 2,500 people in the intricacies of asbestos removal. Except that she didn’t. Instead, she would fill out tests for certificate applicants and enter a passing grade. For $400, the (usually undocumented) worker was handed a certificate and then placed in a job through Deleon’s other enterprise, Methuen Abatement Staffing. Her temporary workers handled hazardous abatement jobs throughout New England. (You can read the sorry details in a fine article by Beth Daley of the Boston Globe here.)
    By the way, the training involves a total of 32 hours – not much of an investment in a life or death matter. (Some ECT students paid $350 and actually completed the training; for an additional 50 bucks, you could skip the training, pocket the certificate and get right to work, earning upwards of $15 per hour.)
    ECT “graduates” went in to hundreds of schools, hospitals, churches, libraries, and homes throughout New England to remove asbestos. Most of them had no idea what they were supposed to do. Now there is deep concern that the workers, mostly young men from Central America, breathed the fibers, which can lodge in the lungs and lead to death decades later. Most had no idea how to properly wear a respirator.
    In addition to their own exposure, these workers may have exposed their families to the cancer risk. Asbestos workers, if not properly trained, can inadvertently carry the fibers home on their clothes or hair.
    More than a third of the 12,750 asbestos worker licenses and renewals issued in Massachusetts between 2002 and 2007 went to ECT “graduates.” In New Hampshire, it was more than two-thirds.
    Crocodile Tears
    In November 2008 Deleon was convicted on 28 felony counts. Shortly before her sentencing, she wrote a rambling, hand-written letter to the sentencing judge. Among other things, she wrote:
    “I pray that God will forgive my soul and allow me to atone the rest of my life repaying and repairing the harm I have done. This is my solemn promise…I commit myself to work ceacelessly [sic] to make restitution to the government and to the keeper of my soul until I draw my last breath life (sic).”
    The reference to “last breath” is especially ironic, given that many of her “students” – along with innocent family members – will suffer excruciatingly painful deaths, as their breathing slowly and inexorably shuts down.
    Facing more than 7 years in prison, Deleon skipped town. There is a warrant out for her arrest. Oh, she abandoned her 3 year old son in the process. Alas, it appears that “the keeper of her soul” doesn’t have a whole lot to work with…

    Insurance industry scandal watch

    Tuesday, August 9th, 2005

    Joe Paduda has been doing so much heavy lifting in his diligent tracking of the many investigations into insurance wrongdoing that we are thinking he may need to change his blog name to “Scandal Central.” It’s almost like one of those whack-a-mole carnival games – new developments seem to keep popping to the surface daily.
    Today, Joe reports on a guilty plea filed by an underwriter from a Liberty Mutual subsidiary who was submitting unattractive bids to Marsh McLennan. This enabled the broker to steer clients to insurers with the best commissions.
    Yesterday, Joe reported on similar charges being levied against Arthur Gallagher & Co, the offshoot of a probe into practices involving several large public entities, an investigation that Florida’s Attorney General says may involve bid rigging. This follows on the heels of other Florida problems that surfaced in Broward County involving Gallagher Bassett and Corvel.*
    Last Friday, Joe blogged about 14 insurance execs from Marsh, AIG, and Zurich who pled guilty to various charges in the Spitzer investigations.
    He’s also recently updated the Ohio coingate developments, a many-headed hydra of scandal that is now ensnaring Governor Taft. Some other problems have been bubbling to the surface with the Ohio Bureau of Workers Compensation, too, in the form of unusual markups paid to servicing hospitals.
    A collective black eye
    Whether we want to or not, all of us who work in the industry have front row seats to these sorry spectacles since they involve some of the industry “leaders.” As an industry, we will be years restoring good faith with clients. And though I have no sympathy for the malefactors, I do feel badly for some of the decent, conscientious workers in the scandal-riddled firms. If things follow the patterns of other recent corporate scandals, a few bigwigs may or may not be called to account, but the real price may well be paid by the hundreds, if not thousands, of honest workers when the inevitable job reductions and reorganizations ensue.
    Many of these firms were the trusted vendors that employers turned to as stewards of their loss experience and as watchdogs for fraud. Ironically, while the back door was being guarded by pit-bulls to prevent a few wayward employees from making off with the piggy bank, the front door was wide open so the serious thieves could saunter off with the safe.
    The bottom line: caveat emptor
    We’ve long been proponents of the idea that employers need to be active, savvy buyers and managers of their workers comp programs, but never more so than now. For most employers, workers comp is not simply a matter of dollars and cents (although that is reason enough to pay attention), it is also a matter of employee relations and reputation management. When hiring vendors to assist in these matters, we’ve always encouraged employers to buy for quality, not for price, but the fact that these scandals are tarnishing some of the “quality” names in our industry says that employer scrutiny doesn’t reach deep enough. And, for the most part, we aren’t talking about the mom and pop employer here – many of the employers who were gouged are large corporations with legions of lawyers and accountants. It sure looks like it’s time for buyers to step up due diligence in the “trusted vendor” selection process.
    *edited on 8/10. The second news item dealt with Gallagher Bassett, not Arthur Gallager & Co.

    Google New Hires!

    Monday, June 20th, 2005

    If you were to Google the name “Dr. Jayant Patel,” you would find over 20,000 references going back a number of years. The more recent entries are undoubtedly the most alarming. “Dr. Death” has been implicated in the demise of 87 patients at a municipal hospital in Bundaberg, Australia. He has become infamous for not washing his hands between surgeries, for failing to use anesthesia during surgery and perhaps most famously, for performing a colostomy backwards (I’m not sure what that would look like, and I don’t really want to know). If you do take a few moments to google his name, you would be more diligent in researching the doctor than were his previous employer and the executive recruitment firm that brought him to Australia. Therein lies our tale.
    Bundaberg is a farming community on the eastern coast of Australia, just south of the Great Barrier Reef. They are famous for “Bundy Rum” — an alcoholic beverage that presumably bears no relationship to the star of the dubious sitcom, “Married with Children.” The local municipal hospital was delighted to find a former professor of surgery at the State University of New York who was willing to relocate to Australia. Unfortunately, his tenure down under was not unlike his work in Oregon and New York. He had been suspended in New York and his license had been revoked in Oregon, where he had once worked for Kaiser Permanente.
    Whistleblower Blown Off
    One of the striking aspects of the story as presented in the New York Times (registration required) involves the head nurse at the hospital, Toni Ellen Hoffman. She continuously raised her concerns about Dr. Patel’s performance with hospital administrators, only to be told that she had a “personality problem.” After a particularly shocking incident, where a 9 year old girl watched her father die through Patel’s neglect, the nurse requested an inquiry. The administration’s response? They named Patel as the employee of the month!
    Finally, as the result of a legislative inquiry, Dr. Patel’s name was published in a paper. An enterprising reporter Googled the name and the scandal finally exploded. Dr. Patel fled the country, returning to Oregon where he lives in a mansion and appears to be unenthusiastic about returning to Australia, where he could face charges of homicide.
    Management Lessons
    We often talk about the potential negligence involved in hiring and entrusting incompetent or dangerous people to carry out their responsibilities. Here we certainly have a case of negligence in hiring: the hospital in Bundaberg was so excited to find a credentialed foreigner willing to join their staff, they did not look beyond the documents he presented about himself. As we have seen, a simple Google search would have exposed Patel as both incompetent and dangerous.
    In addition, Patel carried letters of reference from several of his Oregon colleagues. These letters were provided after his termination for cause; the doctors who wrote them are likely to find themselves involved in the many lawsuits that are going to come out of this situation, under the legal concept of “negligent reference.” Then again, perhaps the colleague who described Patel as “above average” has a very low opinion of the average doctor!
    Beyond these examples of negligence, hospital administrators really messed up when they failed to respond to the alarms raised by a trusted member of the staff. The administration went into a denial mode that will severely compound their negligence in hiring: it’s bad enough to drop the ball on reference checking, but far more serious to ignore the evidence right in front of your eyes. The lawyers will have a field day.
    Some are calling Patel a psychopath. Others think he is simply incompetent. The bottom line is that he did not belong in any operating room, anywhere in the world, including one in a relatively remote town on the shores of Australia. With the advent of the internet, the HR folks in Australia had access to the same data available in New York City. So here’s our advice: google new hires. It doesn’t cost anything, it only takes a few moments, and it might save you a whole lot of pain, suffering and trouble.