About Insurance Fraud
The Office of the District Attorney has a vertical unit to prosecute Insurance Fraud cases to combat the underground economy that is costing the State and Orange County residents millions of dollars of taxes and higher premiums.
Specially trained prosecutors and investigators work closely with the California Department of Insurance to detect, investigate and prosecute Workers’ Compensation Insurance Fraud, Healthcare and Disability Insurance Fraud, Auto Insurance Fraud, Prevailing Wage Fraud and fraud in connection with Sober Living Homes and Addiction Treatment or Recovery Centers. OCDA trains its prosecutors and investigators to become experts in the field of insurance.
Wage Theft
The Orange County District Attorney’s Office prosecutes labor exploitation as well as predatory employers who commit wage theft.
Wage theft is a persistent problem that takes advantage of the most vulnerable victims by keeping wages out of the pockets of the workers who earned them. California’s labor laws protect all workers, regardless of immigration status.
Wage theft occurs when an employer intentionally withholds an employee’s wages, by unlawful means, with knowledge that compensation is due to the employee.
Examples of wage theft include wage claims for unpaid wages, intentional violations of minimum wage or prevailing wage laws, or an employer’s willful refusal to pay overtime to non-exempt employees in accordance with labor laws.
If you suspect an employer of committing wage theft, please report it using the contact information below.
Wage Theft Tip Line
Number: 714-648-3660
Email: wagetheft@ocdapa.org
In the 24-25 fiscal year, the Orange County District Attorney’s Office
In the 24-25 fiscal year, the Orange County District Attorney’s Office
- Filed 3 cases on 5 defendants
- Obtained 40 search warrants on 40 locations
- Conducted 15 investigations with 11 still pending regarding wage theft.
Fees
The Public Administrator (PA) fees are comprised of statutory and extraordinary fees. Statutory fees are computed based on a statutory percentage of the total value of the estate in accordance with Probate Codes §§ 10800, 10810. The statutory fees are designated for both administration and legal services. All fees are subject to Court approval and not paid until so approved.| Estate Assets | Fees |
|---|---|
|
First $ 100,000 |
4% Administration and 4% Legal |
|
Next $ 100,000 |
3% Administration and 3% Legal |
|
Next $ 800,000 |
2% Administration and 2% Legal |
|
Next $ 9,000,000 |
1% Administration and 1% Legal |
Trainings and Outreach
Orange County District Attorney’s Office is available to conduct trainings and outreach to the public, private companies, labor unions and other workers’ organizations, and to the insurance industry.
If you are interested in receiving a training or other outreach for your group, contact us here: Speakers Request Form
Workers’ Compensation Fraud
The Workers’ Compensation Insurance Fraud Division prosecutes a large variety of cases in our fight against workers’ compensation insurance fraud which costs Californians between an estimated $1 billion to $3 billion every year. Our team works together to investigate and prosecute a large variety of cases in criminal court in Orange County. Common types of workers’ compensation insurance fraud that the team prosecutes are listed below.
Fraud by Medical and Legal Professionals/Providers (Provider Fraud)
Fraud by doctors, chiropractors, lawyers and other professionals further harm workers that were legitimately injured on the job and need care to get better. These professionals either bill insurance companies for services that they did not give to the injured worker or give patients procedures, medical supplies, or prescriptions that they do not need. The team also prosecutes lawyers, doctors, chiropractors, and other professionals who pay (in money or services) another person to recruit or refer patients.
Fraud by Employers
- The Workers’ Compensation Insurance Fraud Division prosecutes a variety of fraud by employers including employers who do not accurately report their employees’ payroll, employment status (unfairly calling employees independent contractors) or job duties to their insurance companies in order to illegally reduce their workers’ compensation insurance premiums/payments (Premium Fraud). Premium Fraud is unfair to other businesses who are competing fairly.
- The team also prosecutes employers who do not have or do not maintain a workers’ compensation insurance policy for their employees in violation of Labor Code section 3700 and employers who deny benefits to their employees by discouraging injured workers from filing a workers’ compensation claim in violation of Insurance Code section 1871.4.
Fraud by Employees
Our team also prosecutes employees, including government employees, for Claimant Fraud. Examples of these prosecutions include:
- Employees who say an injury happened at work when it did not;
- Employees who do not report other income they have while they are receiving benefits;
- Employees who lie about their recovery while receiving workers’ compensation benefits so that they can receive benefits longer (e.g., an employee who says that he still cannot perform certain movements like lifting heavy objects when he can perform these movements in his private life such as at the gym).
Fraud by Contractors in Public Works
The Workers’ Compensation Insurance Fraud Division works to hold contractors in the public works system accountable. Public Works contractors violate the law when they bid for public works projects and later fail to pay a proper prevailing wage or fringe benefits to their employees (violation of Labor Code section 1778) or they dissuade their workers from filing a workers’ compensation claim if injured on the job (violation of Insurance Code section 1871.4).
Fraud by Insiders
The Workers’ Compensation Insurance Fraud Division also prosecutes insiders like insurance brokers who commit fraud in the workers’ compensation system by pocketing their client’s premium payments and falsifying insurance policy documents.
Disability and Healthcare Insurance Fraud
The Disability and Healthcare Insurance Fraud Division investigates and prosecutes schemes that defraud disability and healthcare insurance companies and often hurt vulnerable individuals. Some examples are below:
Fraud by Medical and Legal Professionals/Providers (Provider Fraud)
Fraud by doctors, psychologists, laboratory companies, pharmacists and other professionals further harm individuals who seek medical treatment. These professionals either bill insurance companies for services that they did not give to the patient or give patients procedures, medical supplies, or prescriptions that they do not really need. The Disability and Healthcare Insurance Fraud Division also prosecutes doctors, chiropractors, laboratory companies and other professionals who pay (in money or services) another person to recruit or refer patients.
Fraud in the Addiction Treatment Industry
The Disability and Healthcare Insurance Fraud Division has a specialized team to investigate and prosecute fraud related to addiction treatment centers and sober-living homes called the Sober Living-Home Investigation and Prosecution (SLIP) Team. Patients addicted to opioids are particularly vulnerable to fraud within the addiction treatment industry and the addiction treatment industry is largely unregulated. Some schemes include marketers, doctors, and laboratory companies that operate within a scheme to pay addicts to receive medical or mental health treatment, procedures, prescriptions or laboratory tests (some of these procedures are experimental and could even seriously harm the patients).
OCDA Sober Living telephone tip line: (714) 664-3950
OCDA Sober Living referral email: soberlivingreport@ocdapa.org
Disability Fraud
The Disability and Healthcare Insurance Fraud Division also prosecutes individual claimants who attempt to cheat the system by continuing to collect disability payments after they have returned to work or after they have recovered from their injuries.
Other Prosecutions
The Disability and Healthcare Fraud Division also prosecutes other types of fraud including fraud by pharmacists or embezzlement by insiders in the disability and healthcare insurance industry.
You can report suspected disability and healthcare insurance fraud to the Orange County District Attorney’s Office Insurance Fraud Unit by emailing hffraudfd1@ocdapa.org.
OCDA Healthcare fraud referral email: hffraudfd1@ocdapa.org
OCDA Sober Living telephone tip line: (714) 664-3950
OCDA Sober Living referral email: soberlivingreport@ocdapa.org
Automobile Insurance Fraud
The Automobile Insurance Fraud Division is a concentrated team that investigates both fraud by policyholders of vehicles as well as fraud by individuals who are involved in the treatment of personal injuries that resulted from an automobile collision.Fraud by Policyholders & Arson
The Automobile Insurance Fraud Division prosecutes insurance policyholders who file false claims based on staged collisions or traffic accidents. The team also prosecutes those who falsely report a vehicle as stolen to their insurance companies. Some of the automobile insurance fraud cases that the team prosecutes involve arson, which creates a major public safety risk.Fraud by Medical and Legal Professionals/Providers (Provider Fraud)
The Automobile Insurance Fraud Division prosecutes fraud by doctors, chiropractors, lawyers and other professionals that further harm individuals that already suffered personal injuries from auto accidents. These professionals either bill insurance companies for services that they did not give to the patient or give patients procedures, medical supplies, or prescriptions that they do not really need. The team also prosecutes lawyers, doctors, chiropractors, and other professionals who pay (in money or services) another person to recruit or refer patients.Insider Fraud
The Automobile Insurance Fraud Division prosecutes insiders like insurance brokers who commit fraud in the automobile insurance system by pocketing their client’s premium payments for auto insurance and falsifying insurance policy documents.How Do I Report Workers’ Compensation Insurance Fraud?
Workers’ compensation insurance fraud costs Californians between an estimated $1 billion to $3 billion every year. Help the Orange County District Attorney’s Office fight workers’ compensation insurance fraud.
You can report suspected insurance fraud to the Orange County District Attorney’s Office Insurance Fraud Hotline by calling 714-648-3650 (anonymous calls accepted) or via email at wcfraudfd1@ocdapa.org.
Orange County District Attorney’s Office works closely with the California Department of Insurance (CDI). You can contact Orange County’s CDI office via phone or fax.
California Department of Insurance Regional Office
Orange, CA 92868
Phone: (714) 712-7600
Fax: (714) 456-1838
The public can report suspected fraud to California Department of Insurance here: https://cdiapps.insurance.ca.gov/CRIMS/publicform/
Insurance carriers, TPAs, and self-insured employers can report suspected fraud to California Department of Insurance via an electronic FD-1 here: https://cdiapps.insurance.ca.gov/crims
OCDA Healthcare fraud referral email: hffraudfd1@ocdapa.org
OCDA Sober Living telephone tip line: (714) 664-3950
OCDA Sober Living referral email: soberlivingreport@ocdapa.org
What is the 3700 Project?
The Orange County District Attorney’s Office in conjunction with the California Department of Insurance is working proactively around the county to educate both business owners and workers with regard to the laws surrounding workers’ compensation insurance (California Labor Code Section 3700). It is essential for employees to know they are covered by workers’ compensation insurance in case they are injured. Additionally, it is important for employers to know their competitors are not unfairly competing by failing to pay insurance premiums. Most importantly, workers’ compensation insurance protects the employer from being sued directly, incurring significant civil penalties through the Department of Industrial Relations, having your business ordered to stop operating and ensures that if a worker is injured at work, the employee will receive medical care and disability payments while the injured worker is unable to work.
WHAT IS CALIFORNIA LABOR CODE SECTION 3700?
All California employers must provide workers’ compensation benefits to their employees under California Labor Code Section 3700. If a business employs one or more employees, it must satisfy the requirement of the law.
- California mandates that any business that employs even one person (other than the business owner/owners) must carry workers’ compensation insurance.
- Insured businesses are reported to the State Workers’ Compensation Insurance Rating Bureau (WCIRB).
- If a business is found operating with employees, and the WCIRB has no record of the business having coverage- the owner can be cited for a violation of: Labor Code Section 3700.5.
As part of this program, the Orange County District Attorney’s Office will send out an initial letter, select to view sample letter. If no response is received, then a follow up visit will be conducted. Investigators may ask to see the business insurance accord, select to view sample accord.
AUTHORITY
The director, an investigator for the Department of Insurance Fraud Bureau or its successor, or a district attorney investigator assigned to investigate workers’ compensation fraud may, at any time, require an employer to furnish a written statement showing the name of his or her insurer or the manner in which the employer has complied with Section 3700. Failure of the employer for a period of 10 days to furnish the written statement is prima facie evidence that he or she has failed or neglected in respect to the matters so required. The 10-day period may not be construed to allow an uninsured employer, so found by the director, any extension of time from the application of the provisions of Section 3710.1. An insured employer who fails to respond to an inquiry respecting his or her status as to his or her workers’ compensation security shall be assessed and required to pay a penalty of five hundred dollars ($500) to the director for deposit in the State Treasury to the credit of the Uninsured Employers Fund.
PENALTY
- The failure to secure the payment of compensation as required by this article by one who knew, or because of his or her knowledge or experience should be reasonably expected to have known, of the obligation to secure the payment of compensation, is a misdemeanor punishable by imprisonment in the county jail for up to one year, or by a fine of up to double the amount of premium, as determined by the court, that would otherwise have been due to secure the payment of compensation during the time compensation was not secured, but not less than ten thousand dollars ($10,000), or by both that imprisonment and fine.
- (b) A second or subsequent conviction shall be punished by imprisonment in the county jail for a period not to exceed one year, by a fine of triple the amount of premium, or by both that imprisonment and fine, as determined by the court, that would otherwise have been due to secure the payment of compensation during the time payment was not secured, but not less than fifty thousand dollars ($50,000).
- (c) Upon a first conviction of a person under this section, the person may be charged the costs of investigation at the discretion of the court. Upon a subsequent conviction, the person shall be charged the costs of investigation in addition to any other penalties pursuant to subdivision (b). The costs of investigation shall be paid only after the payment of any benefits that may be owed to injured workers, any reimbursement that may be owed to the director for benefits provided to the injured worker pursuant to Section 3717, and any other penalty assessments that may be owed.
HOW MUCH DOES WORKERS’ COMPENSATION INSURANCE COST?
- Workers’ Compensation rates are not regulated by the State, rates can vary from carrier to carrier. Consumers should shop around for a carrier that best meets their needs, cost, services, access and familiarity with an industry.
- A number of factors go in to determining the annual premium the insurance carrier will charge. These factors include:
1. Industry classification;
2. The company’s history of work-related injuries (Experience Modification or ex-mod);
3. The payroll.
WHERE CAN WORKERS’ COMPENSATION INSURANCE BE PURCHASED?
- A Licensed Insurance Company, or
- State Compensation Insurance Fund (State Fund) Customer Service: (888) 782-8338
* The top 50 Workers’ Compensation insurers can be accessed at CDI website: www.insurance.ca.gov
FOR ADDITIONAL INFORMATION CONTACT:
The California Department of Insurance 1-800-927-4357
website: WWW.INSURANCE.CA.GOV