Department of Workforce Development

State Recovers Fraudulently Claimed Worker’s Compensation Dollars

MADISON - The Department of Workforce Development (DWD) today announced that $26,710 in fraudulently claimed Worker’s Compensation dollars was recovered by the state in 1998, according to an annual report released today entitled "Allegations of Worker’s Compensations Fraud."

"The message is clear: Wisconsin will not tolerate fraud," said DWD Secretary Linda Stewart.  "Although Wisconsin is among the lowest in the nation in Worker’s Compensation fraud, we will continue aggressively prosecuting those who attempt to bilk the system."

In one case, the state recovered $16,000 from an individual who claimed to be injured, but was caught on surveillance video doing physical activities that misrepresented the seriousness of his injury.  He received four years of probation and 90 days in jail in addition to the restitution he was ordered to pay.

"Wisconsin Employers, workers, and consumers are all losers when it comes to Worker's Compensation fraud," Stewart said.  "It forces up insurance premiums for employers and cuts into operating margins.  This ultimately leads to lower wages for employees and higher prices for consumers."

Wisconsin’s fraud program is unique in that insurance carriers and self-insured employers are required to do their own fraud investigations.  The Department conducts no independent investigations, but serves as a clearinghouse, providing relevant information to employers, insurers, prosecutors and policy makers.  Allegations of abuse are reviewed and referred to prosecutors when the Department determines there is a "reasonable-basis-to-believe" fraud has occurred.

This year’s report found that Wisconsin measured up well with other states like Michigan and Minnesota that have much more costly specially funded fraud units.

"Compared to other states, Wisconsin gets more bang for its buck when it comes to rooting out Workers Compensation fraud," Stewart said.  "Our successful, cost-effective approach is a model for the nation."

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