South Carolina Workers Comp Consultant Convicted of Fraud -Updated

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The South Carolina Workers Comp Consultant

A South Carolina Workers Comp consultant was recently convicted of Fraud. Here are the facts: (Thanks to the Charleston Post Courier – a fine newspaper)

City Seal Of South Carolina Workers Comp Consultant North Carleston
Wikimedia Commons – City of North Charleston

Bob Kohn was a member of the state House of Representatives from North Charleston in 1990 when he became a target in the FBI’s corruption sting of the Legislature. Once confronted, he agreed to cooperate with federal agents in bringing down other lawmakers and was later sentenced to 15 months behind bars.

Prosecutors alleged that starting around 2002, Kohn took part in reporting a company payroll and staff size that was much smaller than it was in reality. By doing so, it would have lowered the company’s insurance premiums by many thousands of dollars. Kohn actually stood over the shoulder of a company secretary and telling her which employees to “peel-off” in an attempt to report the smaller payroll.

In one year, Knight’s payroll size fell from $600,000 to $60,000, Holliday said. For the 2004 year, the company had a payroll of more than $1 million but only reported about $173,000. The overall effect saved Knight’s about $370,000 in premiums over three years.

The fraud allegation came to light after an 18-year-old employee of Knight’s was killed in December 2005 during a below-decks sewer tank accident while he was working on a ship-refit inside Detyens Shipyard. Four others were hospitalized. An insurance company was one of the first to detect an inconsistency in the company’s reporting after Knight’s insurance numbers did not add up.

The conviction means Kohn likely will return to prison, possibly facing as many as three years. The jury at the federal courthouse in Charleston deliberated for about an hour. The sentencing will come at a later date.

What can be learned from this? Check out my next post.

 

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One Response

  1. It would be nice to know what penalty, if any, the employer sustained. The employer certainly was aware that what it was doing was fraud. Why is it so common that the employers who perpetrate frauds are also the ones who do not protect their employees – this employer had an 18 year old die on the job, while it was trying to defraud its insurer. In over thirty years in this business, it is not the first time I have seen an employer that tried to game the premium auditing system that also had a poor safety program. These guys seem to think they are entitled to be dishonest if it saves them money.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

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