Wednesday, July 29, 2015

Illinois Light on Fraud

Illinois has been criticized in the past for a lax attitude towards workers' compensation fraud.

Back in 2013 the Illinois Department of Insurance's Workers' Compensation Fraud Unit referred 18 workers' compensation fraud cases to prosecutors in 2012 that resulted in seven indictments, according to an annual fraud unit report by Insurance Director Andrew Boron released on June 28. The unit received only 119 fraud referrals and investigated a total of 64 workers' compensation fraud claims in 2012.

When WorkCompCentral ran that story, it compared the state's overall statistics to Los Angeles County, which generates more than 10,000 fraud reports each year alone. LA County has a population of 9.9 million people, 3 million less than the state of Illinois' population of 12.9 million.

This year the critics will likely still be vocal. And they should be. 
IL WCFU website graphic...

The latest report from the WCFU reflects there were just six convictions in 2014, with only one resulting in jail time.

This pales in comparison to other jurisdictions. California convicted five people of workers’ compensation fraud in April alone. The Ohio Bureau of Workers' Compensation reported 11 workers' compensation fraud convictions in May alone and the Florida Department of Financial Services reported 259 workers' compensation fraud convictions in 2013.

It's easy to say that Illinois is easy on fraud. Certainly there isn't a whole lot of deterrent - the risk of getting caught, whether cheating employees, employers or other, is very, very low.

The statistics reflect a failure in the allocation of responsibilities.

Local Illinois prosecutors do not pursue workers’ compensation fraud claims on their own, relying instead on referrals from the WCFU, according to Cynthia Vargas, the communications manager for Lake County State’s Attorney Mike Nerheim.

The WCFU does not actively look for cases, but relies on referrals, according to the report. There were 29 accusations of fraud made by lawyers, 17 from investigators working for insurance companies, 15 directly from insurance companies, 13 by employers, nine from private citizens and the rest from other sources.

That WCFU doesn't actively look for fraud doesn't explain the light activity.

What the state lacks is an incentive for local prosecutors to pursue fraud.

California, for instance, makes dollar allocations to district attorneys offices for fraud prosecutions. The system has its flaws of course, and may result in misallocated dollars, but certainly Illinois seems to lack any incentive for local law enforcement to deter fraudulent activity.

While the budget for the WCFU was $950,000 for the unit's operations in the 2014-15 fiscal year, according to Gov. Bruce Rauner's budget proposal the unit spent only $370,300 of that money.

Is it any wonder that, despite three years of investigative activity into fraudulent claims made by a huge population of prison guards at a single facility, there were no arrests, despite all of the media coverage?

The WCFU website is at

No comments:

Post a Comment