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Workers’ Compensation Fraud

 Workers' Compensation Fraud in California - Insurance Code 1871.4

Workers' compensation fraud laws are defined under California Insurance Code 1871.4 and Penal Code 549 and 550 PC. This is a form of insurance that pays employees for an injury or disability occurring where they work.

This means workers' compensation fraud laws are violated if someone receives payment, or attempts to receive a payment, from a claim for compensation they are not entitled to receive.

California workers' compensation fraud laws can be violated by:

  • knowingly making a false statement, or
  • encouraging someone else to make false statements in order to receive insurance benefits,
  • submitting multiple claims for same treatment.

A common example of workers' compensation fraud is when someone falsely claims they were injured while at work, but the injury occurred at another location not related to their employment.

Workers' compensation fraud cases are normally “wobblers” that can be charged as a misdemeanor or felony crime.

For additional information, our Los Angeles criminal defense lawyers are reviewing the law below.

California Insurance Code 1871.4

Insurance Code 1871.4 is used by prosecutors to file most workers' compensation fraud cases, which is described under the False and Fraudulent Claims Act. This statute is defined as:

  • “Knowingly making a false or fraudulent statement, either written or a material representation, in order to obtain insurance benefits. Knowingly assisting, aiding, conspiracy, or soliciting a person to recover insurance benefits without cause.”

Workers' compensation is essentially an insurance policy paid by employers for at-work injured employees to cover cost of medical expenses, lost wages, permanent disability, and death benefits.

Workers' Compensation Fraud Laws in California

The employee doesn't have to prove their injury was someone else's fault in order to receive insurance benefits.

You can violate Insurance Code 1871.4 in many different ways, such as:

  • claiming a non-work-related injury occurred at work,
  • claim a fake injury or falsely exaggerate the seriousness of an injury,
  • falsely stating no previous claims were filed,
  • failing to disclose a previous injury,
  • collecting insurance benefits from several employers for same injury,
  • working another job while receiving benefits (double-dipping).

California Penal Code 549 and 550 PC

California Penal Code 549 PC describes how a business owner can commit the crime workers' compensation fraud.

California Penal Code 550 PC describes how workers' compensation fraud is connected to health care fraud.

Other related statues include Penal Code 487 PC grand theft, Penal Code 470 PC forgery, and Penal Code 118 PC perjury.


If convicted of a misdemeanor violation of workers' compensation fraud, it's punishable by:

  • up to one year in a county jail,
  • a maximum fine of $150,000, or two times the amount of fraud,
  • payment of restitution to employer and insurance company

If convicted of felony workers' compensation fraud, it's punishable by up to five years in a California state prison, a maximum fine of $150,000 or double the amount of fraud, and restitution.

Defending Workers' Compensation Fraud Cases

More and more, we're seeing charges for workers' compensation fraud being filed across Los Angeles county in the over 40 courthouses that make up that jurisdiction.

I've been practicing there now almost three decades and had a lot of success defending people with workers' compensation related charges.  Being concerned about going to jail or prison if you're charged with these charges is certainly a legitimate concern.

When you're taking any type of government money and claiming some sort of injury or loss and lying about it or putting in multiple claims or falsifying any documentation and they've got the evidence to prove the same, you've got a real problem because stealing from the government is like stealing from the mafia.

They get a piece of everything and if you try to take any of their money in an unlawful manner, they're going to come at you and they've got unlimited funds; they've got unlimited investigation power and unlimited authority when it comes to these types of offenses.

Judges and prosecutors really bow down to the government in workers' compensation fraud related offense and they're going to settle most arguments in their favor.

Guiding You Through a Difficult Situation

That's why the first thing you need to do if you're charged with a workers' compensation fraud related offense, or if you're being investigated, is to get a great attorney because your attorney is going to be the one who will help guide you through a prickly situation when the government is coming after you and when their agents are coming after you:

  • I get right to the forefront;
  • I deal with the government;
  • I deal with their agents;
  • I deal with the prosecutors;
  • I deal with the police;
  • I deal with the Insurance Commission — whatever it takes.

Because what's happening in a workers' compensation fraud type situation is, the government is trying to help injured employees.

They're making employers get certain insurance to protect employees, so if they get hurt or injured on the job, they can be compensated and their boss doesn't cheat them.

But if you then try to cheat the system in any way, or a boss or an employer tries to cheat the situation in any way, then that really strikes at the fabric of our workers' compensation employment process and it puts you in a position where they're going to try to punish you; they're going to try to make an example of you.

Negotiation for Best Possible Outcome on Case

So, we need to take you out of that mold where they're making an example of you. We need to show other things about you — your history, your record, your future, your family and what actually happened in this case.

Criminal Defense for Workers' Compensation Fraud in California

When you give your side of the story and explain why you found yourself in this position, and then we have to figure out what you're going to do about it to make things right.

If you can pay the money back, that's a good start.  That now helps you with the prosecutors who feel like they have to get this money back.

You're going to be ordered to pay the money back anyway if you're guilty of the crimes.

But if you can pay it back up front, you now have leverage to negotiate a solid deal for yourself so you can preserve your rights, your freedom and your future.

Do you want to stay out of jail?  Do you want to stay out of prison?  Give them their money back and explain why you did what you did and let your attorney work for you.

I'll have you come in.  We'll get a game plan together.  I just need you to be honest and tell me what happened and I will help you figure out how to get through this, how to get out of the legal system as fast as possible and how to get the result you must have.

Hedding Law Firm is located in Los Angeles County at 16000 Ventura Blvd #1208 Encino, CA 91436. .