Asbestos contractor gets jail for defrauding Workers' Comp insurers

Chong-mum Chae, the owner of an asbestos-removal company, has been sentenced to four years in prison after cheating workers' compensation insurers out of $1.6 million in premiums, The New York Times reports.

The conviction comes as the inspector general for the New York Workers' Compensation Board, William Gurin, pledges to "[Change] the focus of our investigation so it's less on claimant fraud and much more intensely on health care provider fraud and employer premium fraud." This is heartening news for both claimants and their New York workers' compensation lawyers, as claimants have long received lopsided attention in the Board's investigations.

The 71-year-old Mr. Chae pleaded guilty to mail fraud and tax fraud after more than a decade of dodging the high workers' compensation premiums associated with the risky asbestos removal his company performed. By repeatedly changing the name of his business and falsely classifying dozens of employees as independent contractors, Mr. Chae managed to stay one step ahead of the insurance carriers while paying for insurance for a single employee, his receptionist.

In addition to jail time, as part of his plea bargain Mr. Chae will have to pay the $1.6 million he owes in premiums as well as a federal tax lien that has yet to be calculated. Since he is an illegal immigrant he will also be deported after he has served his sentence.

New York workers' compensation lawyers can hope that Mr. Chae is the first of many dishonest employers the Workers' Compensation Board investigates. After years of emphasis on claimant fraud it is about time employers receive that same scrutiny.

[The New York Times via City Room]