Texas Company Pleads Guilty to Comp Fraud Charges

March 28, 2005

Texas Mutual Insurance Company reported that RBH Enterprises Inc. of Keller, Texas, recently pleaded guilty to a first-degree felony offense for workers’ compensation insurance fraud-related charges.

Judge Julie Kocurek of the 390th Travis County District Court ordered the company to pay a $100 fine to the state and $25,000 in restitution to Texas Mutual.

Texas Mutual investigator Sandra Milburn uncovered evidence that RBH Enterprises was fraudulently represented as an independent subcontractor by an insured. The insured applied for workers’ compensation coverage through Texas Mutual, but it did not report the payroll of RBH. Because insurance companies use payroll as a basis for their premium calculations for workers’ comp coverage, the scam allowed the insured company to obtain a lower premium than it actually owed.

Milburn turned the evidence over to Travis County Assistant District Attorney Donna Crosby. The RBH investigation was part of the Texas Mutual “Zero Tolerance for Fraud” policy.

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