Publications

   
 California Governor signs a Coalition-backed bill into law, closing a workers’ comp kickback loophole.

California has enacted Assembly Bill 1398 to close a loophole that limited prosecution of workers’ compensation kickback schemes to misdemeanors instead of felonies. The issue surfaced after courts applied the Williamson rule, concluding that kickback conduct charged under the broader insurance fraud statute in the Penal Code could only be prosecuted under the narrower workers’ compensation Labor Code kickback provision. That interpretation was central to People v. Woods, where the Court of Appeal reversed dozens of felony convictions, a decision now under review by the California Supreme Court. During legislative hearings, lawmakers called the bill “common sense legislation that provides prosecutors the tools to properly choose how to handle those cases involving those who prey on injured workers.” The Coalition supported the bill, emphasizing its importance to insurance fraud prosecutors and SIUs, urging Governor Newsom to enact the bill with his signature. With the legislation now law, prosecutors have clear authority to pursue felony charges in serious kickback cases, restoring accountability and strengthening California’s fight against workers’ comp fraud. The pending Woods appeal will determine how far these reforms reach and could shape similar antifraud efforts nationwide.

NCOIL releases advance materials as Coalition prepares to speak twice at NCOIL Annual Meeting, next month. The National Council of Insurance Legislators (NCOIL) has released its 30-day materials for the 2025 Annual Meeting, November 12–15 in Atlanta, Georgia. The Coalition Against Insurance Fraud will take an active role, with Brent Walker, Director of Government Relations, scheduled to speak twice in support of proposed amendments to two NCOIL model laws. This continues the Coalition’s long-standing work in shaping consumer-focused antifraud policy nationwide. Last July, at NCOIL’s Summer Meeting in Chicago, Walker addressed the Financial Services & Multi-Lines Issues Committee on Trends and Developments in Combatting Insurance Fraud, alongside Louisiana Insurance Commissioner Tim Temple, Colonel Simon Blank of Florida’s Department of Financial Services, and NICB. Walker highlighted the need to protect consumers from predatory post-disaster contractor schemes and other fraud that targets vulnerable residents. Walker also spoke before the Property & Casualty Insurance Committee during consideration of the Storm Chaser Consumer Protection Model Act, supporting re-adoption while supporting updates (beginning on page 275) to expand the definition of contractor beyond roofers. To prepare, the Coalition has discussed this with a broad range of stakeholders, including associations representing the roofing contractor and property restoration industries. In Atlanta, the Coalition will also back proposed amendments (beginning on page 143) to the Insurance Fraud Model, originally introduced by the Coalition in 1995, to broaden the definition of a fraudulent insurance act, continuing its decades-long leadership in educating legislators and advancing effective antifraud laws through NCOIL. If Coalition members would like to discuss these proposed amendments further, please contact brent@insurancefraud.org.

Workers’ Comp Task Force Webinar – Premium Fraud and the Intersection to Auto Insurance Fraud

Yesterday, over 250 attendees joined a Coalition webinar focused on workers’ compensation premium fraud, a $25 billion-a-year crime in the United States. National experts with decades of experience in investigation, auditing, and prosecution shared insights on how premium fraud intersects with auto insurance fraud, tax evasion, wage theft, and other schemes by dishonest businesses.The session was moderated by Lina Valencia Ignatius, Investigations Project Lead at Pinnacol Assurance, and featured panelists Kathy Lowe, Retired Audit Manager and Premium Fraud Investigator at Delta Group; Eric Kriczky, CPCU, CFE, Supervising Forensic Consultant in the Premium Fraud SIU at Liberty Mutual; and Dominic Dugo, Chief Deputy District Attorney and Workers’ Comp Task Force Co-Chair for the Coalition Workers’ Compensation Fraud Task Force. The discussion highlighted real-world recovery efforts, including a 2025 Coalition Premium Fraud Case Study demonstrating how nearly $1.5 million was recovered in a single investigation. A copy of the webinar will be available next week on the Coalition website, with an announcement and link to access it. As a reminder, Workers’ Compensation resources are available on the Coalition website, (insurancefraud.org) located under the Member Resources tab and clicking on Topics.

Over $430K stolen by LA County workers in employment fraud, prosecutor says. Thirteen Los Angeles County government employees have been charged with stealing more than $430,000 in fraudulent unemployment benefits during the COVID-19 pandemic. Despite being fully employed, the defendants allegedly filed false claims with the California Employment Development Department between 2020 and 2023, claiming to have earned less than $600 per week. Each has been charged with one felony count of grand theft and faces up to three years in state prison if convicted. Those charged include employees from multiple agencies, notably the Department of Children and Family Services, the Department of Public Social Services, and the Sheriff’s Department. District Attorney Nathan Hochman called the scheme “egregious,” noting that it exploited funds meant for Californians truly in need. While 172 instances of suspected fraud were identified in a broader county audit, only 13 cases remain prosecutable due to statute of limitation constraints. Officials emphasized the importance of whistleblower reports in uncovering public-sector fraud and encouraged residents to use the county’s anonymous fraud hotline to report suspected misconduct.

Kulpmont woman charged with insurance fraud following vehicle crash. A 27-year-old Kulpmont woman, Jessica Wright, has been charged with insurance fraud and theft by deception after allegedly lying to her insurer about the timing of a vehicle crash. Investigators say Wright’s Progressive policy had been canceled earlier in November 2024 due to nonpayment. She reinstated the policy at 4:40 p.m. on Nov. 26, then filed a claim just over two hours later, reporting a crash that occurred before the policy was active. Records show the accident happened around 4:39 p.m., just minutes before coverage was reinstated. Progressive concluded that Wright misrepresented the facts to secure coverage for a crash that had already occurred. She now faces felony charges filed by the Pennsylvania Attorney General’s Office.

Sumter County woman accused of staging hit-and-run crash for insurance money. A South Carolina woman, Ulanda Shamicka Yarborough, has been arrested for allegedly staging a hit-and-run crash to file a false $10,000 insurance claim. Investigators say Yarborough and a 19-year-old accomplice, Jamari Demetrius Pringle, fabricated a March collision where their vehicle was supposedly rear-ended and forced off the road. Both initially claimed injuries requiring medical care, but an investigation by Progressive and the South Carolina Law Enforcement Division revealed the crash never happened. Pringle and another participant later admitted it was staged. Pringle was arrested earlier this month and released on bond, while Yarborough was booked into the Sumter-Lee Regional Detention Center. A third suspect remains at large.

Pharmacy owners plead guilty in Medicaid fraud involving unregulated HIV medications. Haussermann’s Pharmacy in Philadelphia has agreed to pay $2.3 million in restitution after pleading guilty to felony Medicaid fraud involving unregulated HIV medications. Owned by Subhash Patel under Surnil Pharmacy Inc., the pharmacy was found to have purchased and dispensed HIV drugs from illegitimate sources, then billed Medicare and Medicaid for reimbursement. A six-month investigation by the Pennsylvania Office of Attorney General’s Medicaid Fraud Section revealed that Patel stocked unregulated medications, often with removed or altered labels, and bypassed legitimate wholesalers. Approximately 100,000 tablets were dispensed before the scheme was uncovered. While no patients were reported harmed, the court ordered restitution and imposed a five-year suspension of Patel’s pharmacist license and his eligibility to serve as a Medicare or Medicaid provider. Haussermann’s Pharmacy and Patel’s four other pharmacies have since closed. Officials condemned the scheme as a dangerous abuse of public trust that prioritized profit over patient safety.

Wisconsin contractor fined for acting as a public adjuster. Wisconsin Insurance Commissioner Nathan Houdek has ordered a $6,000 civil forfeiture against a contractor found to be unlawfully acting as a public adjuster and violating state insurance laws. The contractor’s business model combined home repair services with “claim assistance” through assignments of benefits, a practice prohibited under Wisconsin law.Houdek emphasized that anyone negotiating insurance claims must adhere to public adjuster regulations, which bar financial conflicts of interest. The decision reinforces consumer protections by ensuring that claim negotiations remain transparent and unbiased. The Office of the Insurance Commissioner also cautioned consumers to review contracts carefully and avoid assigning insurance benefits to contractors or third parties, as such arrangements are not allowed under Wisconsin law.