Did you know the Insurance Information Institute estimates that ten cents out of each dollar paid in workers' comp premiums is wasted on fraud? Unscrupulous medical providers and attorneys contribute to this waste. And in today's economy, some employers evade insurance and taxes by paying workers in cash. This cash-based payroll is known as the underground economy and in California, it is estimated at $100 billion. This raises the price of the goods and services you and I buy every day and affects the ability of legitimate businesses to be competitive. As a result, legitimate and lawfully operated companies are forced out of business. Employers' compensation laws were designed to accomplish four goals. To provide medical care to injured workers, to sustain workers' income while injured, to provide benefits to families of workers who died as a result of on-the-job accidents or injuries, and to protect employers from costly and unpredictable lawsuits by injured workers. As a general rule under this system, if an employer has workers' comp coverage, filing a claim is the injured worker's only recourse. If the employer doesn't have coverage, then the worker can sue the employer directly. While most people involved in workers' compensation claims are trustworthy, some are dishonest. The California Insurance Code and Penal Code state that any person making a false or fraudulent statement for the purpose of obtaining or denying workers' compensation benefits can be convicted of a felony. Those who commit fraud unfairly penalize all those who do not. California has mandated that the Department of Insurance and Local District Attorneys must actively detect, investigate, and when necessary prosecute workers' compensation fraud. There are three main types of workers' compensation fraud. Employer fraud, where business owners lower or eliminate their insurance premiums by intentionally under-reporting their payroll or by dissuading workers from making a claim. Employee fraud, in which workers knowingly deceive their employers about the extent, circumstances of or even existence of a workplace injury in order to receive a benefit they would not otherwise be entitled to. And provider fraud, in which professionals such as medical providers, attorneys, and others, either knowingly provide unnecessary treatments, knowingly bill for services they did not provide, or conspire with employers to not report injuries. All types of fraud entail considerable risks and often very undesirable consequences. Those who commit workers' compensation fraud make it difficult for those who truly have injuries to obtain benefits and receive fair treatment in the workers' compensation system. If you're thinking about committing a workers' compensation fraud, just remember, the person next to you may be the one who turns you in. As your district attorney, I made a point of working with the California Department of Insurance to take an active role in investigating and prosecuting workers' comp fraud. Please watch the information presented here for important tips about provider, applicant, and employer fraud, as well as what you can do if you suspect fraud.