The Alabama unemployment rate is higher than it has been in five years. In October it rose to 5.6%. In Chambers County it has reached a staggering 14.3% with Wilcox, Bullock, Lowndes and Dallas counties all over 10%. It is projected to be worse in 2009. Nationally, the poor economy has already resulted in a dramatic increase in discrimination claims being filed by laid-off employees. Alabama employers can expect an increase in fraudulent workers’ compensation claims as well. 

The Workers’ Compensation Division of the Alabama Department of Industrial Relations has a fraud unit which will aggressively pursue those who attempt to abuse the system. Just recently, the Attorney General successfully prosecuted an Anniston woman for fraud and secured a guilty plea for first degree theft.

Examples of workers’ compensation fraud include the following: Reporting an off-the-job injury as an on-the-job injury; Falsely reporting an accident; Exaggerating or falsely complaining of accident injury symptoms; and Not reporting employment income while receiving workers' compensation benefits. 

If you want to report a suspected fraudulent claimant, the Alabama Attorney General's Office in a joint effort with the Alabama Department of Industrial Relations has established the following toll-free number:

Workers' Compensation Fraud Hotline 1-800-923-2533

On November 18, 2008, the Montgomery Advertiser reported that the Attorney General’s office successfully prosecuted an Anniston woman for workers’ compensation fraud. Apparently, the woman, Charlene Trapp Smith, 59, misrepresented to an insurance provider that her disabled husband was still alive and accepted worker’s compensation checks for five years after he died.

Smith pleaded guilty to first-degree theft and was ordered to pay $21,000 in restitution. She was sentenced to 36 months in the penitentiary, was ordered to pay a $500 fine and court costs. The Attorney General, Troy King, was quoted as saying "worker’s compensation insurance is a critical resource for those who are truly and legitimately in need. It is not a slush fund to be exploited by those who see an opportunity to take what does not belong to them. It is a crime to take worker’s compensation benefits to which you are not entitled, and it is appropriate that Charlene Trapp Smith be held to account for her crime. Let this be a warning to others who may be tempted to steal worker’s compensation benefits that this is indeed a crime and they will be prosecuted."

The victim in this case was the Alabama Forestry Fund, a provider of worker’s compensation insurance for forestry-related businesses. According to the President of the Fund, Boyd Kelly, "the Forestry Fund is a group fund which allows the state’s forest industry employers to pool their resources to cover each others’ workers’ compensation liabilities. This kind of fraud takes away money that could have been used to pay legitimate disability benefits and medical bills for workers who are injured on the job. I commend Attorney General King and his team for the investigation and prosecution of this fraud against the hard working, honest employees of Alabama’s forestry community."

Congratulations to Boyd Kelly, the Alabama Forestry Fund, and Attorney General Troy King on a job well done!