Greenbelt, Maryland – Chief U.S. District Judge Deborah K. Chasanow sentenced Darlene M. Altvater, age 48, of Mechanicsville, Maryland, late yesterday to five months in prison, followed by five months home detention and three years of supervised release, for two counts of making false statements to obtain federal disability benefits. Chief Judge Chasanow also ordered Altvater to pay restitution, with the exact amount still to be determined. Read the rest of this entry »

Richard S. Hartunian, United States Attorney for the Northern District of New York, announced today that TRACEY RAPONI, age 42, of Martville, New York was sentenced today, September 12, 2012, in U.S. District Court in Syracuse, New York before the Hon. Norman A. Mordue, U.S. District Court Judge. RAPONI was sentenced to 18 months incarceration in connection with her plea of guilty to Fraud in Obtaining Federal Employees Compensation Benefits, in violation of 18 U.S.C. § 1920. RAPONI was also ordered to pay $326,467.88 in restitution. Following her term of incarceration RAPONI will be on a term of supervised release for three years. The court also imposed a $100 special assessment.

On April 30, 2012, TRACEY RAPONI, a former letter carrier with the U.S. Post Office in Fulton, N.Y., admitted to defrauding the U.S. Postal Service and U.S. Department of Labor of $326,467.88 by making false statements and representations to obtain federal workers’ compensation benefits. RAPONI admitted that she falsely represented that she was not employed, self-employed, or involved in a business enterprise during a period that she was collecting workers compensation benefits, when in truth she worked for Tuff-N-Uff Kennels, a dog breeding, boarding, and training business owned by her husband Gale Raponi.

This case was investigated by the U.S. Postal Service Office of Inspector General and the U.S. Department of Labor Office of Inspector General.

SACRAMENTO, Calif. — Michael McCree, 60, and his wife Debra Fields, 58, both of Vacaville, were charged today in two separate indictments for fraud, United States Attorney Benjamin B. Wagner announced.

McCree was charged with 18 counts of making false statements in order to receive Workers’ Compensation and other compensations and reimbursements. According to the indictment, McCree worked for the U.S. Post Office for six months in 1988 and 1989 before filing a workers’ compensation claim for an alleged back injury. Since 1989, the Department of Labor has been paying McCree monthly wage loss compensation and reimbursements for medical-related travel. From January 2007 through June 2012, McCree received more than $120,000 in reimbursements for travel, but according to court documents, he did not travel to the location listed and did not receive medical treatment.

“This indictment marks a significant effort in the ongoing battle against fraudulent workers’ compensation claims. The workers’ compensation program benefits thousands of postal employees who have suffered legitimate on-the-job injuries. But false claims by postal employees undermine the system. Special Agents with the U.S. Postal Service Office of Inspector General investigate such claims and work hand in hand with the U.S. Attorney’s Office to ensure violators are brought to justice,” said Special Agent in Charge Nichole Cooper, Pacific Area Field Office, U.S. Postal Service Office of Inspector General.

According to the indictment, Fields is charged with three counts: concealing property, making a false oath, and making a false statement. In June 2011, she filed for bankruptcy and was discharged of her debts that she listed as more than $550,000. Fields did not disclose that her husband was receiving monthly wage loss payments and or reimbursements for travel. She also failed to disclose some of McCree’s bank accounts.

These cases are the product of an investigation by the United States Postal Service, Office of Inspector General. Assistant United States Attorney Todd A. Pickles is prosecuting the cases.

If convicted, McCree faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. Fields faces a maximum sentence of five years in prison for each count. The actual sentences, if the defendants are convicted, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

A former New York City distribution clerk has been sentenced to probation for workers comp fraud:

Richard S. Hartunian, United States Attorney for the Northern District of New York, announced that PAUL SKALICKY, of Plymouth, New York, was sentenced on Friday in U.S. District Court in Syracuse, New York before the Hon. David E. Peebles, U.S. Magistrate. SKALICKY, age 64, was sentenced to 5 years probation in connection with his plea of guilty to Fraud in Obtaining Federal Employees Compensation, in violation of 18 U.S.C. § 1920. Additionally, SKALICKY was ordered to pay restitution in the amount of $20,124.54. The court also imposed a $25 special assessment.

According to press reports, Skalicky was a New York City distribution clerk for the US Postal Service when he claimed to be disabled.

According to the US Attorney,

On October 18, 2011, SKALICKY admitted, in violation of 18 U.S.C. § 1920, that on or about February 23, 2010, he knowingly and willfully made and caused to be made materially false and fraudulent statements and representations in connection with the receipt of federal workers compensation benefits. In 1999, SKALICKY began collecting federal workers compensation benefits for a sprained ankle. On February 23, 2010, SKALICKY told an agent with the Department of Labor that he remained disabled and that he required a cane to ambulate. Covert surveillance conducted by agents from the United States Postal Service Office of Inspector General established that SKALICKY did not use a cane or require the use of a cane to walk.

This case was investigated by the U.S. Postal Service Office of Inspector General and the Department of Labor Office of Inspector General.

From the American Postal Workers Union:

Postal workers who were injured on the job won an important victory on Feb. 24, when the Merit Systems Protection Board (MSPB) issued a precedent-setting decision [PDF] in the case of James C. Latham et al v USPS. The ruling has important implications for postal workers who were affected by the Postal Service’s National Reassessment Process (NRP).

The MSPB decision affirms the Postal Service’s obligation to restore employees who have been injured on the job to any medically suitable work that is available, and affirms the MSPB’s jurisdiction over appeals involving that issue. Under the NRP program the Postal Service routinely reduced the work hours of injured employees who were working in modified assignments – or eliminated their work hours entirely.

“The MSPB ruling gives a well-deserved slap in the face to the Postal Service for its heartless mistreatment of injured workers,” said Sue Carney, APWU Human Relations director. “The Board’s decision opens the flood gates for injured workers who were improperly denied work to receive justice through MSPB.”

Restoration

The Federal Employees’ Compensation Act (FECA) says that federal employees who suffer compensable injuries enjoy certain rights to be “restored” to their previous positions or to comparable positions.

Prior to this landmark ruling, however, no MSPB judge had found that a reduction in work-hours or the elimination of work under the NRP program violated an employee’s restoration rights. Of the dozens of previous appeals, every case was rejected, either on jurisdictional grounds or because the Postal Service’s actions were not deemed “arbitrary and capricious.”

The appellants in the Latham cases were working in modified assignments as a result of job-related disabilities when the Postal Service implemented the NRP program and withdrew the assignments. These employees were told there were no “operationally necessary” tasks for them to perform and were directed to take leave. They were instructed not to report for duty until they were informed that medically suitable work was available.

Each of the displaced workers filed an MSPB appeal and requested a hearing. They asserted they were denied “restoration” following their injuries and claimed their modified assignments were still available. They argued that the agency, by discontinuing their modified assignments, had violated the Employee and Labor Relations Manual (ELM) and committed various “prohibited personnel practices.”

The appellants alleged that their former duties were being performed by other employees and that the agency was guilty of disability discrimination. They asked the board to order the Postal Service to return them to their modified assignments with back pay.

Jurisdiction

In order to establish Board jurisdiction over a restoration appeal, an appellant must prove by preponderant evidence that:

(1) He was absent from his position due to a compensable injury;

(2) He recovered sufficiently to return to duty on a part-time basis or to return to work in a position with less demanding physical requirements than those previously required;

(3) The agency denied a request for restoration; and

(4) The agency’s denial was “arbitrary and capricious.”

It was undisputed that the Latham appellants satisfied the first three jurisdictional elements, leaving them to prove that the denials of restoration were arbitrary and capricious. Resolving that issue required MSPB to first address whether the Board’s jurisdiction under Title 5 may encompass a claim that an agency’s violation of its internal rules resulted in an arbitrary and capricious denial of restoration.

The board consolidated the appeals and asked the parties to address how the Postal Service acted in an arbitrary and capricious manner and to explain the agency’s restoration obligations.

Arbitrary and Capricious

In response, the appellants and several “friends of the court” stressed that the USPS had acted arbitrarily and capriciously when it failed to follow its own rules. They maintained that the Postal Service’s handbook and manual commanded the USPS to provide partially recovered individuals with any available work within their medical restrictions, although they generally conceded the agency is not required to provide “make work.”

FECA provides that federal employees who suffer compensable injuries enjoy certain rights to be restored to their previous or comparable positions. Congress has explicitly granted the Office of Personnel Management (OPM) the authority to issue regulations governing agencies’ obligations in this regard. Pursuant to this authority, OPM has issued regulations requiring agencies to make certain efforts toward restoring compensably injured individuals to duty, depending on the timing and extent of their recovery. OPM’s regulations require at minimum that agencies “make every effort to restore partially recovered individuals in the local commuting area.” At a minimum, this would mean treating these employees substantially the same as other individuals with disabilities under the Rehabilitation Act of 1973, as amended.

The Postal Service argued that OPM regulations governing the restoration of partially recovered individuals were beyond OPM’s power and therefore invalid. The USPS said the statute authorizing OPM to issue the regulations, 5 U.S.C. § 8151(b), provides restoration rights only to fully recovered individuals. The Postal Service also asserted that the statute provides only for restoration to work that comprises the “essential functions of an established position.”

Follow the Rules

Concluding that the issues presented in the appeals directly concerned the interpretation of a regulation issued by OPM, the board requested an advisory opinion from OPM. OPM said agencies are required to “meticulously follow their own rules,” and said an agency’s failure to follow its own rules concerning the restoration of a partially-recovered individual would be arbitrary and capricious – even when the rules go beyond the minimum restoration obligation set forth in Section 353.301(d).

The MSPB ruled that OPM’s interpretation was “controlling,” and concluded that the Postal Service’s alleged failure to adhere to its own regulations could be the basis for establishing MSPB jurisdiction.

The board also concluded that the Postal Service has a legal obligation to employees with job-related disabilities and is required, pursuant to ELM § 546 and EL-505, Chapters 7 and 11, to restore partially-recovered individuals to duty in whatever tasks are available, regardless of whether those tasks comprise the essential functions of an established position.

Signals for Future Appeals

The decision also signals the line of inquiry the board will use as the framework to analyze appeals. “This information will serve appellants well,” Carney said.

Advocates should be prepared to prove:

(1) Are the tasks of the appellant’s former modified assignment still being performed by other employees?

(2) If so, did those employees lack sufficient work prior to absorbing the appellant’s modified duties?

(3) If so, did the reassignment of that work violate any other law, rule, or regulation?

MSPB cautioned that evidence pertaining to general declines in mail volume and displacement of non-injured workers will likely be immaterial in the absence of a connection between these matters and the availability of the appellant’s former job duties or the duties of the employees who absorbed the appellant’s former tasks.

The board also emphasized that it will not examine whether the agency followed the “pecking order” or minimized “any adverse or disruptive impact” in assigning modified duties as set forth at ELM § 546.142(a). The board reasoned these matters pertain to the circumstances of restoration that were actually accomplished, and are therefore outside the Board’s jurisdiction. The Board clearly stated that it is only concerned with whether the agency actually denied an appellant restoration following partial recovery from a compensable injury and whether that denial was arbitrary and capricious.

Throughout its analysis the Board cited statutory history, emphasizing the rights of partially-recovered and fully-recover recovered employees and underscoring that injured or disabled federal employees – including employees of Postal Service – must be treated in a fair and equitable manner. The Board stated it believed its actions served the individuals the statutes were intended to protect.

Tools Available

Since the onset of NRP, the APWU Human Relations Department has counseled affected members who were unable to hire an attorney to file MSPB appeals as compensationers, making the same arguments as those proven effective in Latham. (A template for filing MSPB appeals has been posted on the APWU department’s National Reassessment Process Web page since 2009.)

The guide does not replace legal advice, Carney said, and she noted that the board often orders the offending agency to pay the legal fees of successful appellants.

“It is important for appellants to understand they have the burden to prove, not just assert, their claims,” she added.

“Although the USPS maintains that it terminated the NRP program, the Postal Service has continued its ill-fated practices,” Carney observed.

“The guide is a practical tool for compensationers whose work hours have since been reduced or eliminated. Appellants may also find the review of precedential and non-precedential MSPB NRP rulings educational.” The decisions can be found by visiting www.mspb.gov and searching keywords: NRP or USPS denial of restoration.

MSPB Issues Precedent-Setting Decision in NRP Cases.

The House of Representatives passed bi-partisan legislation supported by the APWU to update benefits for injured federal and postal workers on Nov. 29. Introduced in the House by Education and the Workforce Committee Chairman John Kline (R-MN), the bill was co-sponsored by Ranking Minority Member George Miller (D-CA), Rep. Tim Walberg (R-MI), and Rep. Lynn Woolsey (D-CA), and was approved by a voice vote.

The bill (H.R. 2465 [PDF]) would raise benefits for funeral expenses (to $6,000) and compensation for facial disfigurement (to $50,0000); these benefits have not been increased since 1949. The bill also would streamline the claims process for workers who sustain a traumatic injury in an armed-conflict zone; permit physician assistants and nurse practitioners to certify disability for traumatic injuries, and label injuries sustained due to terrorism as “war-risk hazards.”

Speaking on the House floorduring consideration of the bill, Rep. Woolsey criticized the approach taken in a Senate and House committee during consideration of the 21 st Century Postal Service Act of 2011 (S. 1789), and the Postal Reform Act of 2011 (H.R. 2309), respectively.

“I was disappointed to see that the Senate Committee on Homeland Security and Government Affairs has reported out postal reform legislation that adopted many of the Department of Labor’s proposals to cut FECA, and then went a step further and cut them even more deeply, without having first undertaken an analysis of the impacts,” she said. “The Senate committee even imposed some of these cuts retroactively. Frankly, taking a meat axe to the FECA program without first doing your homework is irresponsible. It is my hope that the legislation before us today, coupled with a bi-partisan commitment to study the matter with care, can serve as an example for the correct path forward for improving FECA.”

In reference to the House bill, Woolsey said:

“I was also troubled to learn that the House Committee on Oversight and Government Reform decided to include changes to FECA in a postal reform bill that would create a separate postal workers’ compensation system outside of FECA. All federal workers should be covered under the same workers’ compensation system, regardless of which agency employs them. Pursuant to House Rules, workers’ compensation programs, including FECA, have been within the primary jurisdiction of the House Committee on Education and Workforce, and I expect that Members of our committee will have an opportunity to weigh in on that bill before it moves forward.”

Consideration of the legislation follows a hearing earlier in the year entitled, “Reviewing Workers’ Compensation for Federal Employees.” APWU Human Relations Director Sue Carney testified [PDF] on behalf of postal and federal employees.

In July 2011, the Education and Workforce Committee asked the Government Accountability Office (GAO) to evaluate the consequences of administration proposals to modify FECA-related benefit levels when permanently injured employees reach Social Security retirement age; reduce benefit levels for individuals with dependents; and establish a three-day waiting period before FECA benefits can begin. The committee has indicated that no further consideration of changes to the Federal Employee Compensation Act is likely until GAO’s evaluation is completed.

APWU-Supported Workers’Compensation Bill Passes House; Legislator Criticizes Postal Bills’Approach to Injured Workers.

Proposed changes to the Federal Employees Compensation Act (FECA) “will negatively affect public servants and their families,” APWU Human Relations Director Sue Carney said in testimony [PDF] before the House Subcommittee on Workforce Protections. The Department of Labor’s proposed Federal Injured Employees Re-employment Act (FIERA), if adopted as written, would strip injured workers of benefits.

At a congressional hearing on May 12, “Reviewing Workers’ Compensation for Federal Employees,” Carney enumerated significant deficiencies in the proposed legislation, stating that the sweeping changes proposed in FIERA provisions would “bring additional favor to employing agencies; cause unnecessary harm, in some cases irreparable harm, to injured workers and their families, and do little to promote the non-adversarial program FECA is intended to be.”

“They should not be permitted to stand,” she said.

Among other sweeping changes proposed by the Department of Labor, FIERA would grant authority to place employees with temporary medical restrictions into OWCP’s vocational rehabilitation program; would permit a reduction in wage compensation even when workers are unable to find suitable work; and would reduce benefits for total and partial disability when injured workers reaches retirement age.

The APWU also objected to proposals that would corral all injured workers, even those with existing approved claims, into FIERA — regardless of their individual medical circumstances. In addition, the union opposed provisions that would reduce income from families of injured workers.

“Injured workers do not reap greater benefits, nor do they lack motivation to return to work when capable, as some have wrongly implied,” Carney testified. “In addition to the physical, mental, and emotional pain that workplace injuries bring, it is important to understand the losses compensationers presently suffer before we consider asking more of these workers.”

The APWU pointed out that the FECA represents a long-standing agreement between the government and federal workers: Its primary purpose is to shield injured federal employees and their families from loss, while limiting the employers’ liabilities.

The Department of Labor failed to support its claims that the proposals would “produce potential cost savings of approximately $400 million over a 10-year period for the American taxpayer,” Carney said. The APWU refuted the figure, pointing out that not all of the costs related to workplace injuries are borne by taxpayers.

Establishing procedures that favor employers over injured workers does little to maintain a fair and equitable atmosphere, she said. “Shrouding them as ‘modernization, return-to-work and administration simplification’ is disingenuous.”

The union believes that the current law should be improved to create more meaningful safety and health mandates to protect workers, and provide better mechanisms to enforce them, Carney said. “APWU feels strongly that the FECA should continue to strive to be a model program, not work to be comparable to insufficient state programs.”

The union offered suggestions to improve the program that would provide better training for claims examiners; improve outreach to employee representatives, physicians, and claimants; and grant OWCP authority to compel employers who have been skirting return-to-work obligations to comply.

“Before we consider passing legislative changes, we must ensure they are meaningful changes,” Carney said, “and examine how the consequences of our actions will impact workers and their families.”

Other witnesses at the hearing were Daniel Bertoni, Director of Education, Workforce and Income Security, Government Accountability Office; Elliot P. Lewis, Assistant Inspector General for Audit, U.S. DOL Office of Inspector General; Gary A. Steinberg, Acting Director of OWCP, U.S. DOL, and Scott Szymendera, Congressional Research Service.

Click here to view all the testimony and watch a video of the hearing on the House Education and Workforce Commmittee’s Web site.

For more information about FECA, visit the Human Relations Dept. pages at www.apwu.org.

via Changes to Federal Workers Compensation Laws Would Negatively Affect Postal Workers.

The USPS Office of the Inspector General has released IG David C. Williams’ prepared testimony ahead of tomorrow’s hearing before Darrell Issa’s House Oversight Committee. In it, Williams says the system is prone to abuse, and that the Department of Labor has failed to manage it properly:

Mr. Chairman and members of the subcommittee, thank you for the opportunity to discuss workers’ compensation issues and reform. The Federal Employees Compensation Act (FECA) requires federal agencies to participate in the Department of Labor’s (DOL) FECA program. DOL bills each agency annually for compensation paid and non-appropriated agencies also must pay DOL an annual administrative fee.

Eligible disabled employees receive 66 2/3 percent (or 75 percent with dependents) of their basic salary, tax-free plus, medical-related expenses. Also, FECA places no age limit on receiving benefits. This is substantially more than other employees receive when they retire. Though unintended, FECA has become a lucrative retirement plan.

The Postal Service is the largest FECA participant, paying more than $1 billion in benefits and $60 million in administrative fees annually, creating a long-term liability of $12.6 billion. As of February 2011, the Postal Service had about 15,800 disabled employees. Over 8,700 were at least age 55, about 3,100 were at least age 65, and about 900 were between age 80 and 98.

Certain aspects of the program make it susceptible to fraud:

• The claimant’s ability to change their story until their claim qualifies;

• The claimant’s ability to hire a physician rather than use a plan physician to assess their injuries and condition;
• The program incentivizes DOL to collect larger fees if they approve more claims and lose budget dollars if they deny them;
• The lack of effective DOL case management; and
• Employers not being allowed to present or respond to evidence at hearings.

DOL has some fraud detection responsibility, but it’s unclear to what extent. They advise agencies to actively manage their own programs, while still charging administrative fees. There is not a clear delineation of responsibility between (1) agency program managers and (2) their OIGs and (3) DOL and (4) its OIG in detecting fraud. Accordingly, there is significant risk that program oversight will be duplicative or not done.

Since October 2008, we have removed 476 claimants based on disability fraud, recovered $83.5 million in medical and disability judgments, and halted significant future losses. In one investigation, a fraudulent claimant received $142,000 in benefits while she was working as a real estate agent, and we had pictures of her hiking and bungee jumping. She even bought a boat named “Free Ride.” Other investigations have found fraudulent claimants working as martial arts instructors, landscapers, hairdressers and mechanics.

Working with DOL is difficult. They control needed documents, but are often not responsive when we investigate cases. Additionally, they do not take timely action when told that a claimant no longer qualifies for benefits. Even when a claimant is convicted, DOL is slow to terminate benefits.

• We gave DOL an investigative report in 2006 which found a claimant was exceeding his limitations. Even though the employee was willing to return to work, DOL did not reduce his benefits until 2011.

• Fourteen months ago we gave DOL an investigative report containing evidence of fraud by a disability claimant and a subsequent medical exam confirmed the claimant was able to return to work with no restrictions. Despite requests, DOL has taken no action and continues to pay benefits.
• Over a 5-year period one claimant submitted $190,000 in unsupported mileage reimbursements that DOL paid without question.

Stress claims in particular are at high risk for fraud. If a doctor sees a correlation between stress and a claimant’s work, the claim is often approved. In one instance, a claimant’s emotional reaction to a change in work schedule was enough for DOL approval.

The OIG also investigates medical providers involved in criminal matters, including disability fraud and we have recovered $78.5 million since FY 2009. Unfortunately, DOL provides no standardized billing guidelines for doctors, making it difficult to hold them accountable for fraudulent billings. If DOL instituted a system similar to Medicare’s, prosecutors would be more inclined to take these cases. From our reviews, the Postal Service would benefit from having its own workers’ compensation program. Savings would be in the areas of reduced administrative fees, accurate assessment of claims by plan physicians, buyout options, mandatory retirements, immediate access to records, and improved accountability over case management.

FECA is in need of significant reform. Such reform could reduce the substantial risk for fraud and improve program efficiency and effectiveness, while protecting reasonable benefits for legitimate claimants.

A retired mail carrier from Quincy has been accused of keeping his golf-playing and landscaping a secret while collecting worker’s compensation payments. Federal prosecutors said Daniel T. Driscoll, 50, was indicted in Boston federal court this week. Driscoll was accused of submitting false documents and forms to the U.S. Postal Service, his former employer, and to the Department of Labor, in which he failed to disclose his true ability to work and medical condition. Prosecutors said he didn’t report his frequent participation in physical activities from August through October of 2009.

COLUMBUS – A task force created by the Ohio Bureau of Workers’ Compensation (BWC) Special Investigations Department (SID) in collaboration with the US Postal Service Office of Inspector General (USPS OIG) has uncovered workers’ compensation fraud at six businesses that contract with the Postal Service. The task force was created in 2009 to address a trend among contractors of failing to maintain workers’ compensation coverage despite being paid to do so by the Postal Service. Read the rest of this entry »