Fraud Investigations Section
of the N.C. Industrial Commission

Introduction

The 1994 Session of the N.C. General Assembly enacted what has been entitled the Workers’ Compensation Reform Act of 1994. As part of that Act, the General Assembly enacted two statutes that apply to workers’ compensation fraud. N.C. Gen. Stat. §97-88.2 is entitled Penalty for Misrepresentation, and N.C. Gen. Stat. §97-88.3 is entitled Penalty for Health Care Providers.

In 1995, the General Assembly amended N.C. Gen. Stat. §97-88.2 and gave the N.C. Industrial Commission the responsibility for investigating cases of suspected fraud and violations of the Workers’ Compensation Act.

During its 1997 Session, the General Assembly ratified House Bill 618: An Act to Increase the Criminal Penalties for Misrepresentation and for Failure to Secure Compensation Under the Workers’ Compensation Act. This bill amended N.C. Gen. Stat. §97-88.2 and N.C. Gen. Stat. §97-94.

In 2007, the General Assembly ratified Senate Bill 882: An Act to Authorize the Industrial Commission to Employ Sworn Law Enforcement Officers to Perform Fraud Investigations. This bill amended N.C. Gen. Stat. §97-88.2(b).

Mission

The Fraud Investigation Section is composed of two units, the Non-Insured Unit and the Criminal Investigation Unit.

The Non-Insured Unit handles cases involving employers who are operating as non-insured employers in violation of N.C. Gen. Stat. §97-93 and N.C. Gen. Stat. §97-94. An employer is considered non-insured if the employer does not carry workers’ compensation insurance, is not self-insured, or cannot cover the medical costs and compensation due to the injured worker. The Non-Insured Unit investigates referrals to determine whether or not an employer is in compliance. Once an investigation is complete and evidence is gathered, it is presented during Industrial Commission non-insured penalty hearings. A Penalty Hearing in a non-insured case is held simultaneously with the underlying workers’ compensation case being heard. Civil penalties can be assessed covering the entire time-frame that the employer is not insured. The Non-Insured Unit also assists the Office of Attorney General with the enforcement and collection of penalty actions.

The Criminal Investigation Unit operates as a law enforcement agency and is responsible for conducting criminal investigations into cases of suspected workers’ compensation fraud and violations related to workers’ compensation claims involving employees, employers, insurers, health care providers, attorneys, and vocational rehabilitation providers. Fraud Investigators investigate all criminal complaints filed with the Industrial Commission regarding failure of employers to maintain workers’ compensation insurance (N.C. Gen. Stat. §97-94(d)), fraud on the part of employees with regard to the collection or obtaining of workers’ compensation benefits (N.C. Gen. Stat. §97-88.2), fraud on the part of employers with regard to payment or collection of workers’ compensation premiums from employees’ salaries (N.C. Gen. Stat. §97-21), medical payment fraud, and any other claims arising out of violations of Chapter 97 by employees or employers. The Fraud Criminal Investigation Unit works with Judicial Officials and other law enforcement agencies throughout the state to resolve the above investigations in criminal court.

Organization

The Fraud Investigations Section consists of two fraud investigators and one secretary. To report workers’ compensation fraud, dial toll free:

(888) 891-4895 (in North Carolina), Fax: (919) 715-0282, fraudcomplaints@ic.nc.gov

The telephone numbers and e-mail addresses for the Fraud Investigations Section are as follows:
 

Fraud Investigators           Samuel M. Constance	Sam.Constance@ic.nc.gov	(919) 807-2567
Angela G. Hayes	Angela.Hayes@ic.nc.gov	(919) 807-2654
Joe Lynch	Joe.Lynch@ic.nc.gov	(919) 807-2568
Counsel to the Industrial Commission from the Attorney General’s Office Tracy C. Curtner	Tracey.Curtner@ic.nc.gov	(919) 807-2634
Paralegal Barbara Jenkins	Barbara.Jenkins@ic.nc.gov	(919) 807-2569

If you have information regarding workers’ compensation fraud or questions about it, please feel free to contact the Fraud Investigations Section Monday through Friday from 8:00 A.M. to 5:00 P.M. If we are busy or out of the office, please leave a message on our voice mail. Be sure to leave a telephone number and a convenient time for an investigator to contact you. Your identity will be protected.

Workers’ Compensation Fraud Papers

The following papers address various aspects of workers’ compensation fraud:

• Claimant Fraud: Problems with Developing Prosecutable Claims by former Deputy Commissioner Douglas E. Berger.