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Appellate Division Rules Misrepresentations by the Claimant to an IME Is Sufficient for Fraud Finding

In New York, pursuant to Workers’ Compensation Law § 114-a (1), a claimant may be disqualified from receiving workers’ compensation benefits “[i]f for the purpose of obtaining compensation . . . or for the purpose of influencing any determination regarding any such payment, [he or she] knowingly makes a false statement or representation as to a material fact.”    A fact is “material” if it is “significant or essential to the issue or matter at hand,” and it need not be demonstrated here that claimant received compensation to which he was not otherwise entitled or that he did not sustain a compensable injury (Matter of Losurdo v Asbestos Free, 1 NY3d 258, 265 [2003].

Recently the Third Department of the New York Appellate Division entertained an appeal in which the claimant was disqualified from receiving future benefits and forced to pay back past benefits as a result of violating Workers’ Compensation Law § 114-a, therefore committing fraud.  The case, Matter of Poupore v Clinton County Highway Dept. 2016 NY Slip Op 03037 was decided on April 21, 2016.  In this case, the penalty imposed by the Law Judge and the Board Panel was upheld on appeal.

In this claim, the claimant was injured in 2002 while operating power equipment on a roadside when the road bank gave way and he fell. He has an established claim for work-related injuries to his left ankle and leg, pelvis and lumbar back, and was classified in 2005 as permanently partially disabled.

After being classified, he continued to treat with numerous treating physicians, continued to use prescribed narcotic pain medications and received workers’ compensation wage replacement benefits.

In 2012, the employer obtained surveillance of the claimant.  After reviewing the video, the employer alleged that claimant had violated Workers’ Compensation Law § 114-a based upon, among other evidence, video surveillance of claimant.  The video depicts the claimant engaged in activities that the employer argued are inconsistent with, among other things, representations he made to Marco Berard, the orthopedic surgeon retained by the employer who conducted an independent medical examination (hereinafter IME) of claimant on April 27, 2012.

Following a hearing at which the IME doctor and the surveillance investigator testified, a Workers’ Compensation Law Judge (WCLJ) ruled that claimant had violated Workers’ Compensation Law § 114-a by, among other things, fraudulently representing his medical condition to medical providers, and imposed penalties.

The claimant appealed and, the Workers’ Compensation Board modified, agreeing that claimant had made willful misrepresentations during the IME in violation of Workers’ Compensation Law § 114-a, imposed a penalty equal to the wage replacement benefits paid to claimant from April 27, 2012 until September 14, 2012 and permanently disqualified him from receiving future indemnity benefits.  The claimant subsequently appealed the Board Panel’s Decision to the Third Department.

The Third Department upheld the decision of the Board Panel.   They found the Board’s factual finding that the claimant willfully misrepresented his activity capacity and actual disability status during the IME was supported by substantial evidence including the testimony of the IME doctor’s testimony, report and addendum , as well as the surveillance video.

The Court specifically noted that the record indicated that the claimant told the IME doctor that “he cannot do anything any more than sedentary activity” and needs help for all of his activities of daily living.   As a result the IME doctor found the claimant to be totally disabled.   After reviewing the video, the IME doctor could no longer offer an opinion regarding the claimant’s disability due to the discrepancy between the claimant’s statements and the activity in the video.  The video showed the claimant pumping gas, eating out lunch with his wife, sitting in a car, entering his truck, mounting a motorcycle, walking and squatting with no signs of physical impairment. The Court therefore found his statements to the IME doctor as willful misrepresentations of material facts on which the IME doctor relied in giving his degree of disability finding.

As a result, the Court found that the discretionary sanction of permanent disqualification from future wage replacement benefits to be proportionate to the claimant’s material misrepresentations.

In summary, penalties were upheld in this claim because:

  1. For the purpose of obtaining compensation;
  2. The claimant purposely influenced a determination regarding such payment by presenting complaints inconsistent with actual disability to the IME doctor;
  3. By knowingly making a false statement or representation as to material fact; and
  4. All of the above were supported by substantial evidence and testimony including the surveillance video, testimony of the IME doctor, testimony of the investigator who took the video, the original IME report and the addendum.

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