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West Virginia Premium Auditor Charged With Fraud


West Virginia Premium Auditor Colludes With Employer

A West Virginia premium auditor who had worked for Brickstreet was charged with fraud.  Brickstreet had taken over the monopolistic West Virginia Fund in 2006.  The auditor had worked for them since day one.

State Of Auditor West Virginia Premium Auditor Logo
Wikimedia Commons – Government of West Virginia

Please note this is no reflection on Brickstreet as they were the one actually shorted on what amounted to millions of dollars in premium from employment agencies that provided employees to coal mines.  All insurance carriers trust their auditors to the nth degree.

As I have posted very often in this blog, we review policies and audits for any overcharges that may possibly be refunded to employers.   I have not seen a situation where the insurance carrier’s premium auditor actually reported artificially low numbers and received any type of funds from an employer.

A similar charge and conviction was brought against a “premium consultant” and a South Carolina company owner a few years ago.

Map Of West Virginia Premium Auditor Logo

The names of the auditor and the companies involved will not be mentioned in this post.   You may read further on the subject by clicking on the first link in this post.

There was no grand jury convened to charge the individuals involved with the fraud scheme.  There seems to have been some type of plea deal reached as the charges were brought under an information document.

The West Virginia coal industry had been plagued with avoidance of premiums for many years.  According to the WV Gazette,“Before the system went private, the issue of workers’ compensation payments for coal contractors was highly controversial, with major producers allegedly creating a web of contract firms to avoid insurance premiums. A decade ago, a series of state lawsuits, backed by organized labor, forced the industry to pay back millions in workers’ comp debts.”

There may be some recovery of premiums from the auditor as “prosecutors are seeking to seize $415,000 they say is traceable to the crimes, including $226,000 in cash from a safe deposit box. The government also is seeking to seize a Dodge Ram truck, a Harley-Davidson motorcycle and a Yamaha ATV, court records show.

Hand Presenting West Virginia Premium Auditor On Tablet Concept

I have not really ever seen any instances of where an insurance company’s Workers Comp premium auditor had been bribed to keep an employer’s  premium artificially low.   Temporary employment agencies used to be the bane of the Workers Comp system by closing and reopening each year so that their E-Mods would stay at 1.0.

Rating agencies such as NCCI and many of the state-based rating agencies enacted rules that basically eliminated the repetitive open and closing of the same temp agency, but under a new name each time.   Their E-Mods or X-Mods now follow them regardless of the name of the company.

All of our temporary employment agency clients are honest, hard-working people.   I do not think the actions of a few should taint our view of a much needed service in this lagging economy.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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