Injury Compensation Fraud

USPS OIG Investigations

With the largest civilian workforce in country and a multitude of diverse jobs, postal employees are exposed to situations that can cause on-the-job injuries. Fortunately, the Postal Service funds workers’ compensation benefits for employees who sustain job-related injuries. Administered by the U.S. Department of Labor, the Office of Workers’ Compensation Programs (OWCP) provides direct compensation to providers, claimants, and beneficiaries. The Postal Service later reimburses OWCP in a process known as “charge-back billing.”

The vast majority of employees on workers’ compensation receive benefits as a result of legitimate job-related injuries. However, a small percentage of postal employees and health care providers abuse the system. These schemes cost the Postal Service millions of dollars each year in compensation payments, medical costs, administrative expenses and enforcement costs.

The Office of Inspector General initiates criminal investigations when it suspects individuals or health care providers of defrauding the Federal Employees’ Compensation Act (FECA). Criminal prosecutions are an effective deterrent to fraud and permanently prevent the payment of any additional compensation. Any cases that may require administrative action are referred to the Postal Service and the Department of Labor. Special Agents work closely with Injury Compensation specialists from the Postal Service on all phases of these investigations.

Investigative analysts specializing in fraudulent injury compensation investigations examine data and analyze trends to augment investigators’ work in the field. Analysts and agents partner to find solutions to help detect and prevent fraud.

Convicted Former Mail Handler to Pay $393,000 for Workers’ Compensation Fraud

A proactive review of records determined that a former New York Mail Handler concealed his business enterprises from the Office of Workers’ Compensation Programs (OWCP) while receiving compensation payments on the periodic roll. The Mail Handler injured his back in 1988, and began receiving workers’ compensation payments in 1989. Our review revealed that while receiving workers’ compensation payments, the former Mail Handler bought and sold cars for his wife’s automobile sales business.

During the execution of a federal search warrant in March 2007, United States Postal Service Office of Inspector General (OIG) special agents obtained evidence confirming that the former Mail Handler also operated a sign-making business and a driveway-sealing business. In June 2007, the Mail Handler retired from the Postal Service, and in August, he pled guilty in federal court to committing fraud to obtain federal employee compensation. The former Mail Handler agreed to pay $392,864 in restitution. Sentencing is scheduled for December 2007. The Postal Service will realize a cost avoidance of $595,140.