Brownsville, Texas Man Pleads Guilty to Comp Fraud

September 2, 2004

Texas Mutual Insurance Company reported that Jaime Cano of Brownsville, Texas, pleaded guilty to workers’ compensation fraud-related charges. A Travis County judge sentenced Cano to six months of deferred adjudication and ordered him to pay a $200 fine and $3,916 in restitution to Texas Mutual.

Cano allegedly suffered a work-related injury. His doctor placed him in off-work status, and Texas Mutual began paying Cano temporary income benefits (TIBs).

Meanwhile, Cano’s employer became suspicious that he had begun working for another company while continuing to collect TIBs. State law allows injured workers to receive TIBs only while they are unable to work. The law also requires injured workers to notify the workers’ compensation insurance company when they begin working again.

Texas Mutual staff repeatedly asked Cano if he was working while collecting TIBs, and he repeatedly denied it. Texas Mutual opened an investigation, which got a big break when investigator Eileen Cook received an anonymous tip that Cano had, in fact, begun working for another employer.

Cano’s new employer confirmed that he was working and provided a photo of him. Cano’s previous employer positively identified him from the photo, and Cook took the evidence to the Travis County district attorney office, which prosecuted the case.

Investigators call this sort of scam “double-dipping” because the claimant gets paid by his new employer for working and, in effect, gets paid by his previous employer’s insurance company for being too hurt to work. Double-dipping scams, if allowed to continue, can lead to a higher workers’ comp insurance premium for the first employer when the company renews its coverage.