Restaurant Self-Insured Group Wins New Claims Fraud Conviction

-- California Restaurant Workers' Compensation SIG Redoubles Anti-Fraud Initiatives

Sep 07, 2011, 08:00 ET from California Restaurant Mutual Benefit Corporation

SACRAMENTO, Calif., Sept. 7, 2011 /PRNewswire/ -- The California Restaurant Mutual Benefit Corporation (CRMBC) announced a new conviction as part of its intensified campaign against Workers' Compensation fraud.  Jeanette Gallo pleaded no contest to one of the two felony counts of insurance fraud in Superior Court, County of Fresno, on August 31.  Gallo, an assistant manager at a Jack in the Box in Fresno, had filed a stress claim in connection with a robbery in which it was discovered that she had played a part.  Sentencing is scheduled to take place on October 19.

The key to the conviction was immediate investigation by restaurant owners Sanjiv Bhagat and Jyoti Madhura who identified and dug into red flags they observed with the incident.  Gallo had arrived early in the morning to open the restaurant in contradiction to company policy. Bhagat and Madhura noted unusual behavior on surveillance tapes and interviews with employees which added to their suspicions.  Their documentation and close cooperation with City of Fresno detectives lead to the arrest of Gallo and her boy friend on a grand theft charge.  Subsequent follow-up by third party administrator American Claims Management and their special investigations unit, Investigation Solutions, lead to the additional charges of insurance fraud.

The CRMBC has announced two new partners in its anti-fraud campaign.  Investigation Solutions is focusing on unlawful and unethical practices by a handful of providers who bill both for exaggerated and non-existent services.  J.D. Wesson and Associates is handling special claims investigations and employee fraud.  

"Fraudulent activity by a small fraction of providers and employees costs California employers many millions of dollars each year.  Fraud in Workers' Compensation brings real harm to the great majority, the honest employers, employees and doctors, and it costs jobs," said David Mitchell, Chair of the CRMBC Board of Trustees.

About the CRMBC:

The California Restaurant Mutual Benefit Corporation is the state's largest Workers' Compensation self-insured group. Launched on January 1, 2005, CRMBC has over 1600 employers with 4000 locations.

About CHSI:

Founded in 1996, CHSI designs, manages and consults Workers' Compensation programs in California, Nevada and other states.  Patent pending program management technology developed by CHSI is now licensed to insurance, self-insurance and captive programs across the country.

SOURCE California Restaurant Mutual Benefit Corporation