Fraud News Around the Nation

November 9, 2016
Louisiana Man Sentenced Nearly 5 Years for Insurance Theft

A federal prosecutor says a Lafayette, La., man has been sentenced to four years and eight months in prison for stealing more than a million dollars from his sister’s insurance settlement.

U.S. Attorney Stephanie Finley says in a Thursday news release that 37-year-old Kevin Ralph Andrus pleaded guilty to one count of wire fraud in March.

He was sentenced Monday and will have to pay nearly $1.5 million in restitution.

Finley’s release says Andrus had been placed in charge of his sister’s estate after she was incapacitated in an automobile accident. As she recovered, the sister discovered that Andrus had transferred settlement funds to his personal and business accounts.

Finley said Andrus violated an oath to spend the money only on approved expenses benefiting his sister.

Washington Business Owners Charged With 5 Felonies in Workers’ Comp Scam

The owners of a Mill Creek house-cleaning business face felony charges alleging they refused to pay workers’ compensation insurance premiums and shorted an employee out of wages.

Blake Joseph Standley, of Bothell, and Monica Ann Covey-Standley, of Mill Creek, have each been charged with four felony counts of filing false reports to evade workers’ compensation premiums. In addition, they each face a felony count of second-degree theft for allegedly failing to pay one of their workers.

The charges stem from the Standleys’ operation of their business, Kogaty Interiors. The pair, who were married when they operated the company, were slated to be arraigned in Snohomish County Superior Court on Monday, Nov. 7.

The Washington Attorney General’s Office is prosecuting the case based on an investigation by the Department of Labor & Industries (L&I). L&I administers the state workers’ comp system that provides medical and other services to help injured workers heal and return to work.

L&I began its investigation after the department audited another business that Blake Standley managed; that audit led to questions about Kogaty Interiors.

Standley filed reports to L&I in 2013 and 2014 stating that no employees had worked for Kogaty Interiors. Yet bank records showed they were paying employees to clean houses from April 2013 through early July 2014, while the couple also was depositing income for house cleaning services, charging papers said.

In addition, an L&I investigator spoke to employees who had wage and tax statements and time sheets showing the Standleys paid them for stints in 2013 and 2014. Charging papers said the couple should have paid nearly $12,000 in workers’ comp premiums, based on the employee payroll records.

L&I records show the couple now owes more than $77,000 when penalties and interest are included.

One employee also told L&I that the Standleys failed to pay her for about two weeks’ worth of work in late 2014. Though she repeatedly asked to be paid, the woman said the couple ignored her emails and messages, and hung up whenever she called, charging papers said.

She filed a wage complaint to L&I, which determined the Standleys owed her about $1,000. The Standleys haven’t paid the late wages or a $1,000 penalty plus interest.

“There’s simply no excuse for failing to pay workers who did their job and depend on their paychecks,” said Elizabeth Smith, assistant director of Fraud Prevention & Labor Standards. “We aggressively pursue employers who use deception to get out of their responsibility to pay workers and workers’ comp premiums.

“Refusing to pay premiums raises costs for everyone who contributes to the workers’ comp system.”

Employer false reporting and second-degree theft carry a maximum penalty of five years in prison and a $10,000 fine, plus restitution and court costs.

New Jersey Motel Owner Sentenced for Stealing Superstorm Sandy Funds

A New Jersey motel owner who stole more than $81,000 in federal disaster relief funds by falsely claiming he had sheltered Superstorm Sandy victims is now headed to prison.

Sandipkumar Patel received a three-year sentence Friday. The 44-year-old Edison man had pleaded guilty in September to theft by deception and has paid full restitution.

State authorities say Patel fraudulently took $81,567 from a Federal Emergency Management Agency program that paid hotels and motels for rooms temporarily occupied by victims.

Patel and his wife own the American Motel in Toms River.

Authorities say Patel falsely billed FEMA for 11 supposed victims, including eight of whom never stayed at the motel. The three others stayed for shorter periods than were billed or shared a room that Patel had already billed to FEMA.

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