California Correctional Officer Submits Fraudulent Workers’ Comp Claims

May 23, 2006

A former California Department of Corrections and Rehabilitation correctional officer has been arrested on insurance fraud charges for submitting fraudulent workers’ comp claims, according to Insurance Commissioner John Garamendi.

Steve Andrew Felter, 35, was arrested on May 2 and booked into the Amador County Jail with bail set at $60,000. He was charged with seven felony counts of knowingly presenting a false or fraudulent written or oral statement in support of an insurance claim; four felony counts of knowingly making or representing a false or fraudulent statement or representation for the purpose of obtaining insurance compensation; two felony counts of knowingly failing to disclose an event that would affect a person’s right to an insurance benefit or payment; one misdemeanor count of knowingly attempting to commit a crime; and a Special Allegation which would add two years onto Felter’s sentence if he is convicted [pursuant to Penal Code section 12022.6(a)(1)].

According to the California Department of Insurance’s (CDI) fraud investigators, on Feb. 14, 1998, while working as a correctional officer at the Correctional Training Facility (CTF) in Soledad, Felter claimed to have injured his left leg. He alleged that his left knee was injured when an inmate fell onto his leg while he was attempting to break up an altercation between inmates. Felter filled out a workers’ compensation claim form and sent it to the State Compensation Insurance Fund (SCIF) for review. He stated he was unable to work and began receiving workers’ compensation benefits. Felter was cleared by a physician and returned to work. On Dec. 11, 1998, while returning to work as a correctional officer at CTF, Felter claimed to have injured his back when he opened a roof hatch door. He immediately requested and completed another workers’ compensation claim form and then forwarded it for SCIF review. Felter again remained off work and received workers’ compensation benefits until he was able to return to work. He was later cleared by a physician and returned to work.

Throughout the next six years, Felter complained to numerous treating physicians that he continued to experience severe pain in his left knee and low back even though medical intervention did not prove any objective findings relating to his injury complaints. Felter was categorized as a Qualified Injured Worker (QIW) and placed on disability.

While Felter remained off work receiving disability benefits, the California Department of Corrections and Rehabilitation’s Office of Internal Affairs (CDCR-OIA) received a “fraud tip” indicating he was performing activities contradicting his alleged disability level. CDCR-OIA’s investigation and surveillance on Felter confirmed he was performing activities inconsistent with the level of disability which he noted to his treating physicians. Further investigation revealed Felter was working at a Ford dealership at the same time he was receiving vocational rehabilitation benefits to be retrained as a real estate agent.

Due to these inconsistencies on his disability, SCIF conducted a sworn deposition with Felter. During the deposition, Felter allegedly perjured himself with statements relating to his disability and physical activities. Felter said he was not able to perform certain activities that, in contradiction, showed he was indeed able to perform via surveillance video taken by CDCR-OIA. He resigned from the Department of Corrections on Feb. 1, 2006 after being told he was required to return to work as a correctional officer.

As a result of Felter’s alleged fraudulent workers’ compensation claims, SCIF incurred a loss of approximately $67,000. Those funds were paid directly to Felter or on his behalf through industrial disability benefits, workers’ compensation benefits and medical benefits paid to medical providers.

The continuing investigation is being conducted by the CDI Fraud Division, the CDCR-OIA, the Amador County District Attorney’s Office and CalPERS Investigations. SCIF’s Special Investigative Unit assisted in this investigation. The Amador County District Attorney’s Office is prosecuting the case.

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