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)
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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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.