Seven People Arrested For Workers' Compensation Fraud Or Related Charges In Three-County Sweep

NEW YORK, NY (09/10/2010)(readMedia)-- Surveillance videotape showing a man walking freely for nearly a mile and carrying a walker under his arm before he testified that a job-related injury left him unable to walk or stand unassisted is part of the evidence investigators are using in a three-county sweep of suspects accused of workers' compensation fraud.

The suspect, Nicholas Fortuso, of Talmadge Street, Poughkeepsie, is one of seven people arrested. The others include a Rensselaer County woman who cashed checks intended for her deceased father-in-law, a Watervliet man accused of illegally collecting $60,500 and a Middletown business owner.

The arrests are the result of a series of criminal investigations by the New York State Insurance Department's Frauds Bureau and the Office of the Inspector General of the New York State Workers' Compensation Board based on referrals from the New York State Insurance Fund (NYSIF). Other agencies participating in the investigation included the New York State Police, the Albany County Sheriff's Department, Poughkeepsie police and the offices of District Attorneys David Soares, of Albany County, Richard J. McNally Jr., of Rensselaer County, and William V. Grady, of Dutchess County.

The other individuals arrested were identified as John Lanza, 44, of Garden Pathway, Colonie; Andrew Motkowicz, 59, of Sixth Avenue, Watervliet; Peter M. Pelech, 53, of 12th Avenue, Watervliet; Royal Steves, 53, of Alpine Avenue, Queensbury; Khurram Khan, 49, of Tammy Drive, Middletown; and Marjorie A. Forbes, 43, of Seaman Avenue, Castleton.

Insurance Superintendent James Wrynn said: "These arrests should serve as a warning to others who would steal from the system that there are effective procedures in place to detect workers' compensation violations and bring offenders to justice."

NYSIF Chief Deputy Executive Director Francine James said: "These cases span the gamut, from double-dipping to forgery to application fraud, pointing out widespread abuse of workers' compensation and the cost that can be extracted by only a few individuals. It is always important that we remain vigilant in the fight against workers' compensation fraud, particularly at a time when honest working people and legitimate businesses can ill afford to take on more of a financial burden. With help from the public and local law enforcement, NYSIF is committed to aggressively pursue and prosecute felony workers' compensation fraud."

Workers' Compensation Board Chair Robert Beloten said: "We will not allow dishonest employers and workers to take illegal advantage of the workers' compensation system and exploit this important safety net for competitive or monetary gain."

The investigations leading to the arrests were prompted after irregularities were discovered during audits of workers' compensation claims by several of the individuals and routine reviews of workers' compensation certificates filed by two of the individuals who ran businesses.

Four of the individuals are charged with workers' compensation fraud, a Class E felony and they could be sentenced to up to four years in prison if found guilty. Fortuso, who was captured on videotape carrying the walker before using it in a hearing room, is accused of taking $2,900 in benefits he was not entitled to receive. Motkowicz is accused of collecting $60,500 in workers' compensation benefits while he was employed as a driver for a retirement center. Pelech is accused of collecting $6,000 in benefits while he was employed by a local construction company. Steves is accused of working as a mason and general laborer while collecting $8,400 in disability benefits for a job-related injury. Motkowicz, Pelech and Steves all claimed they were not working while collecting benefits.

Forbes is accused of cashing nine benefit checks totaling $5,400 that were intended for her deceased father-in-law. She was charged with a second-degree count of criminal possession of a forged instrument, a felony. If convicted, she could be sentenced to up to seven years in prison.

The remaining two are charged with first degree counts of offering a false instrument for filing, also a felony. Kahn is accused of filing false information on an application for insurance so he could avoid paying $11,000 in premiums owned to the Insurance Fund by another business he operated. Lanza is accused of using fraudulent certificates of insurance to obtain roofing contracts while operating a roofing and construction company.

Fortuso was committed to Dutchess County jail on Thursday without bail pending further court action. The others were released pending further court action.

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