Workers Compensation Fraud – Nevada Laws & Penalties

In Nevada, the crime of  “workers’ compensation insurance fraud” is intentionally providing false information in order to obtain insurance benefits you are not otherwise entitled to. It is a felony carrying up to four years in state prison.

There are various types of workers’ comp fraud, including:

• Applicant fraud, where injured workers fraudulently try to obtain medical care, lost wages, or vocational training.
• Employer fraud, where an employer fraudulently tries to pay lower workers’ comp premiums.
• Carrier fraud, where the insurance company fraudulently tries to avoid paying out benefits.

The following graphic illustrates additional examples of workers’ compensation fraud.

In this article, our Las Vegas criminal defense attorneys will address the following issues regarding workers’ compensation insurance fraud:

• 1. Elements
• 2. Defenses
• 3. Penalties
• 4. Federal Law
• Frequently Asked Questions
• Additional Resources

1. Elements

In Nevada, workers’ compensation insurance fraud (abbreviated “workers’ comp fraud”) occurs when you deliberately try to bilk the system to get financial benefits you are not entitled to. As discussed below, there are many different types of workers’ comp fraud depending on who the alleged wrongdoer is.

Note that these cases are overseen by the Nevada’s Department of Business and Industry and prosecuted by the Workers Compensation Unit of the Nevada Attorney General’s Office (AG).²

Applicant Fraud

As an employee, you commit applicant fraud by doing any of the following to collect worker’s comp insurance:

• Faking your injury or exaggerating the extent of your injury,
• Falsely claiming that your injury occurred on the job, or staging a fake accident,
• Failing to disclose your previous injury,
• Denying filing previous workers’ comp insurance claims,
• Collecting workers’ comp benefits for the same injury from more than one employer, and/or
• Illegally working while simultaneously receiving workers’ comp benefits.

Depending on your case, you may face additional criminal charges, such as for:

• Grand larceny,
• Forgery, and/or
• Perjury.

Employer Fraud

If you are an employer, you commit workers’ comp fraud by trying to get out of paying workers’ comp insurance premiums. Employer fraud usually involves doing one or more of the following:

• Lying about the number of your employees to your workers’ compensation insurance carrier,
• Threatening to terminate or punish your workers for trying to claim workers’ comp benefits,
• Failing to carry workers’ compensation insurance, which most employers are legally obligated to have, or
• Deducting money from your workers’ wages in order to pay for insurance premiums.

Another common type of employer fraud is when an employer misrepresents their workers’ job duties in an effort to pay lower premiums.

Example: Mac’s employee Tom carries inventory around his warehouse, which involves climbing tall ladders and lifting heavy items. However, Mac reports to his workers’ compensation insurance carrier that Tom has a desk job. Since Mac lied to the carrier in order to pay a cheaper premium, Mac could be criminally liable for workers’ compensation fraud.

Carrier Fraud

Carrier fraud is a fraud perpetrated by the workers’ compensation insurance carrier itself. This fraud occurs when an insurance carrier misrepresents a worker’s eligibility to collect benefits to pay that worker less money.

Claim Mills Fraud

Organized workers’ compensation fraud rings are called “claim mills.” Claim mills are typically comprised of:

• Doctors,
• Attorneys and
• Their staff (called “runners,” steerers,” or “cappers”).

Claim mills recruit people to file fraudulent workers’ compensation claims so the claim mill can share in the benefits.

Provider Fraud

Provider fraud is when medical providers, like doctors, take advantage of patients legitimately injured on the job by either:

• Providing unnecessary treatment,
• Overbilling services, and/or
• Billing for services that the provider never performed.

Depending on the case, providers also face charges for health care fraud.¹

Workers’ compensation fraud is a felony in Nevada.

2. Defenses

Here at Las Vegas Defense Group, we have represented thousands of individuals charged with insurance fraud, including those involved in workers’ compensation cases. In our experience, the following three defenses have proven highly effective in reducing or dismissing these charges with Nevada prosecutors, judges, and juries.

1) You Had No Intent to Defraud

Honest mistakes are not crimes. Even working while receiving workers’ comp benefits is no crime if you genuinely believed you were allowed to do both. Lacking fraudulent intent always exempts you from criminal liability for fraud.

Example: Barbara falls from a ladder at her Home Depot job. At the hospital a doctor looking at the wrong X-rays mistakenly informs Barbara that she has a compound fracture and needs to stay off of her leg for four months. Barbara applies for workers’ comp benefits to pay for her four-month leave.

The insurance company conducts an internal investigation and finds that in fact Barbara has only a bad sprain that requires far less bed rest. However, Barbara should not be convicted of workers’ comp fraud because she honestly and reasonably believed that her injury was more severe than it was.

2) You Are the Victim of False Accusations

Every workers’ comp claim passes through several parties: The employee, the employer, a physician, the insurance company, and many of their office staff. Therefore, it may be difficult for the police to determine which party perpetrated the fraud.

Therefore, the police may suspect you are “guilty by association” even when you had nothing to do with it. Or perhaps one of the other parties wrongfully accused you in an effort to save themself.

As long as the D.A. lacks sufficient evidence to prove your guilt, your workers’ comp charges should be dropped.

3) The Police Committed Misconduct

When the police fail to follow proper search and seizure procedures, we can file a motion to suppress, asking the court to disregard any incriminating evidence the police unlawfully discovered. If the court grants the motion to suppress, the D.A. may then be forced to dismiss your charges for lack of proof.

3. Penalties

Most Nevada charges for workers’ comp insurance fraud are prosecuted as category D felonies. The punishment includes:

• 1 to 4 years in Nevada State Prison,
• Possibly $5,000 in fines, and
• Victim restitution, including possible repayment of benefits.

In addition, you may have your professional licenses suspended or revoked. You may also be ineligible to receive future workers’ comp benefits.²

Therefore, workers’ comp fraud carries not only prison and fines, it may cost you your livelihood.

4. Federal Law

The U.S. government has its own federal workers’ compensation program called the Federal Employees’ Compensation Act (FECA). Similar to Nevada, it is a federal crime to attempt to wrongfully obtain FECA benefits by intentionally making false statements or concealing material facts.

The sentence for deliberately trying to defraud FECA is up to five years in federal prison and/or a fine of up to $10,000. You will also lose payments for medical expenses, lost wages, and other benefits under FECA.³

Nevada is a no-fault workers’ comp state. Therefore, you are covered even if your work-related injury was your fault.

Frequently Asked Questions

Can I work while receiving workers’ compensation benefits in Nevada?

Yes. Receiving workers’ compensation benefits does not automatically prevent you from working. Many injured employees return to light-duty work or take jobs that comply with their medical restrictions.

However, you can face workers’ compensation fraud charges if you knowingly conceal your employment, earnings, or physical abilities in order to obtain benefits you would not otherwise receive.

Can social media be used to prove workers’ compensation fraud?

Yes. Investigators may review public social media posts, photos, and videos when evaluating a workers’ compensation claim. Posts showing physical activities that appear inconsistent with a reported injury may be used as evidence.

However, a single photograph or video does not necessarily prove fraud because it may not accurately reflect a person’s medical condition or physical limitations.

How does Nevada investigate workers’ compensation fraud?

Workers’ compensation fraud investigations may be conducted by insurance carriers, private investigators, employers, and Nevada’s Workers’ Compensation Fraud Control Unit. Investigators commonly review medical records, employment records, surveillance footage, witness statements, social media activity, and benefit applications to determine whether false statements or material omissions were made.

What happens if I accidentally make a mistake on a workers’ compensation claim?

An honest mistake is not necessarily workers’ compensation fraud. Prosecutors generally must prove that a person knowingly made a false statement or knowingly concealed a material fact in order to obtain benefits. Clerical errors, misunderstandings, and good-faith mistakes may provide defenses to fraud allegations.

Do I have to repay benefits if I am convicted of workers’ compensation fraud?

Possibly. In addition to criminal penalties, a court may order restitution requiring repayment of fraudulently obtained benefits. A person convicted of workers’ compensation fraud may also be responsible for certain investigation costs and could lose eligibility for future benefits related to the fraudulent claim.

Can employers commit workers’ compensation fraud in Nevada?

Yes. Workers’ compensation fraud is not limited to injured employees. Employers can face criminal liability for conduct such as underreporting payroll, misclassifying workers, concealing employees from insurance coverage, providing false information to insurers, or otherwise attempting to avoid workers’ compensation obligations.

Can medical providers be charged with workers’ compensation fraud?

Yes. Doctors, chiropractors, clinics, and other healthcare providers may face criminal charges if they knowingly submit false bills, perform unnecessary procedures, falsify medical records, or otherwise seek payment for services that were not legitimately provided.

Can a workers’ compensation fraud conviction affect my professional license?

Potentially. A fraud conviction may trigger disciplinary proceedings against holders of professional licenses, including healthcare professionals, contractors, real estate professionals, and other licensed occupations. Licensing boards often consider fraud-related offenses to be crimes involving dishonesty.

What evidence is commonly used in Nevada workers’ compensation fraud cases?

Common evidence includes claim forms, recorded statements, medical records, payroll records, surveillance videos, photographs, social media posts, witness testimony, and communications between the claimant, employer, medical providers, and insurance company. Prosecutors typically use this evidence to show that a false statement was knowingly made.

What should I do if I am accused of workers’ compensation fraud?

You should avoid making additional statements to investigators and consult a criminal defense attorney as soon as possible. A lawyer can review the evidence, determine whether investigators have proof of intentional fraud, and identify defenses such as mistake, lack of intent, insufficient evidence, or inaccurate surveillance interpretations.

Additional Resources

For more information, refer to the following:

• Employees’ Guide to Workers’ Compensation – Brochure provided by the Nevada Department of Industrial Relations (DIR).
• Workers’ Compensation Fraud Unit – Reporting information provided by the Nevada Attorney General.
• Workers’ Compensation Claimant Fraud – Overview provided by the Nevada Attorney General.
• Workers’ Compensation Provider Fraud – Overview provided by the Nevada Attorney General.

Go back to our general Nevada insurance fraud page.