Eleven charged with Workers' Compensation fraud

Federal officials on May 6 announced charges against 11 federal employees for allegedly defrauding the Workers' Compensation program by claiming to be injured or disabled.

According to the U.S. Attorney's Office for the Southern District of New York, some of the defendants also failed to report income they earned from other businesses they were running "while allegedly too disabled to return to their federal employment."

The defendants include 10 U.S. Postal Service employees and one U.S. Navy employee. One defendant was arrested in mid-April and the others were arrested and charged May 6.

“A federal employee is entitled to Workers’ Compensation benefits if he is in fact disabled by a workplace injury," said Manhattan U.S. Attorney Preet Bharara. "As alleged, these defendants all showed remarkable strength and vigor for people claiming to have sustained debilitating injuries."

In addition to the U.S. Attorney's Office, other agencies involved in the case include the USPS Office of Inspector General, and the Labor Department Office of Inspector General's Office of Labor Racketeering and Fraud Investigations.

In one of the examples described by the officials, one of the postal workers submitted a Workers’ Compensation claim indicating she had sustained an occupational injury—carpal tunnel syndrome—in April 2002, and in May 2004 ceased reporting to work and began to draw federal benefits.

Subsequently, doctors' reports in January 2012 and July 2012 verified her disability, and the woman indicated in September 2013 that she considered herself “totally disabled” and “unable to perform any assignment for the Postal Service.”

But during the course of an investigation from October 2011 through September 2013, the office said the woman was observed in stores and gyms engaging in strenuous physical activity. According to the U.S. Attorney's Office, the defendant was observed in a gym using dumbbell free weights, using a weight training machine "to perform shoulder press exercises with the machine loaded with approximately 50 to 100 pounds of weights," and "working out with a personal trainer, including punching a punching bag while wearing boxing gloves."

During the period of alleged fraud, the woman received FECA compensation totaling about $426,114, the office said.

All the defendants are charged with theft of government funds, which carries a maximum sentence of 10 years in prison, and with federal Workers ’ Compensation benefits fraud, which also carries a maximum sentence of five years in prison.