Texas Business Indicted on Workers’ Comp Fraud Charges

A Travis County grand jury indicted Mark Edward Helm and McClanahan Drywall, Inc., of Emory, Texas, on workers’ compensation fraud-related charges, according to an announcement by Texas Mutual Insurance Company.

Helm was an officer of McClanahan Drywall, Inc. and obtained workers’ compensation coverage through Texas Mutual from Feb. 14, 2008, to June 7, 2009. Texas Mutual alleges that, during the periods of coverage, Helm misrepresented the number of employees and payroll associated with the company by falsely representing contract laborers as subcontractors.

Because workers’ compensation insurance premium is based, in part, on payroll, this type of scheme results in an employer being charged a lower premium than it actually owes. By hiding payroll, an employer can gain an unfair advantage over competitors.

Note: A grand jury indictment is a formal accusation, not a conviction, of criminal conduct.

Source: Texas Mutual Insurance Company