Claim fraud occurs when an employee deliberately misrepresents or fails to disclose material facts of an injury and receives workers’ compensation benefits to which he or she is not entitled.

Fraudulent claims typically arise from:

  • Deliberate injuryo Faked or exaggerated injury
  • Malingering
  • Multiple claims involving aliases
  • Non-work injury reported as job-related
  • Misrepresentation of wage loss
  • Working for another employer while collecting temporary total income benefits

Claim fraud is difficult to prosecute because, generally speaking, intent must be demonstrated.

In other words, the prosecutor must demonstrate that the employee knew, or should have known, that he/she was defrauding the system. For that reason, suspected claim fraud must be thoroughly investigated before charges will be filed.

In Hawaii, workers’ compensation fraud may be prosecuted under the workers’ compensation fraud statute or as a theft crime. Under the workers’ compensation fraud statute, fraud of more than $2,000 is a Class “C” felony.

Convicted offenders may be ordered to pay restitution, fined and imprisoned, depending on the severity of the offense. Alternatively, administration penalties may be pursued through the Hawaii Department of Labor & Industrial Relations. HEMIC refers suspected fraud cases for either prosecution or administrative action depending upon the nature and magnitude of the suspected offense.