Calif. Commissioner Enlists Help of DAs to Reform WC System

March 4, 2003

Calif. Insurance Commissioner John Garamendi pushed his workers’ comp reform agenda further along by enlisting the help of the state’s 58 county district attorneys (DA) in combating employee and employer fraud.

Garamendi addressed deputy district attorneys and white-collar crime investigators March 4 at a statewide conference in Orange County where he thanked them for their diligence in prosecuting both employee and employer fraud, which according to Garamendi, is a significant drain on an already broken system. “Fraud is just one more skyrocketing workers’ comp cost driver that must be brought under control,” said Garamendi. “Whether it’s a medical mill of unscrupulous doctors and lawyers, workers filing false claims, or employers cheating the system by misclassifying employees and underreporting payroll, this activity represents billions of dollars in losses to insurers and California consumers who foot the bill.”

In his plan to turn around California’s $15 billion workers’ comp market and encourage more private insurers to return to the marketplace, Garamendi identified fraud as one of the seven issues requiring immediate action. During fiscal year 2001-02, the department’s fraud division investigated more than 1,200 workers’ compensation fraud cases. From those cases, 141 arrests were made and DAs filed 121 cases for prosecution. “While these efforts are admirable, clearly we must do more and we will,” said Garamendi. “I don’t care who you are, the message is simple; there is no free ride in workers’ comp. If you are breaking the law, we will find you and the DAs will prosecute you.”

Garamendi pledged his continued support of the district attorneys whose work is critical in completing the law enforcement loop that puts lawbreakers out of business.

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