The owner-operator of a fish farm in Chenango County, N.Y.,reeled in $66,100 in fraudulent workers' compensation benefits fromthe New York State Insurance Fund before being caught.

Edward Panus, 59, of Afton, N.Y., claimed the benefits in along-running scheme, investigators allege. He submitted signedattestations to a state agency that he had not worked or had anyincome following a job-related back injury in 1988. However, asix-month investigation by the New York State Insurance Department(NYSID) Frauds Bureau and the New York State Police revealed Panushad been self-employed since 1996 as the owner of Ponderosa FishFarm.

Panus is now charged with 13 counts of offering a falseinstrument for filing and one count of committing a fraudulentpractice under the Worker's Compensation Law, all felonies.Arrested by state police in February, he faces up to a maximum offour years in state prison for each charge.

Like many states, New York is aggressively pursuing allegationsof insurance fraud. The NYSID prosecuted 150 such cases in 2008,according to a recently released report. Burdened with the unwieldytitle of "2009 Workers' Compensation Data Report to the Governorfrom the Superintendent of Insurance and Chair, Workers'Compensation Board, Summarizing and Benchmarking Workers'Compensation Data and Examining Progress on Prior Recommendationsfor Improvements in Data Collection," the lengthy report presents acomprehensive picture of the state's $5.7 billion workers'compensation insurance industry.

The mandated report is a byproduct of the state's Workers'Compensation Reform Act, passed two years ago in March 2007. Thatfar-reaching reform package sought to control escalating insurancepremiums, increase benefits, improve the claim process, enhanceenforcement of workers' compensation coverage, reduce fraud, andincrease cooperative activities among the various agencies.

According to the report, two state agencies are responsible forworkers' compensation fraud investigations: NYSID and the WCB'sOffice of Fraud Inspector General (OFIG). NYSID requires mandatoryreporting and receives data and filings from carriers with morethan 3,000 policies. NYSID has the broader mandate of investigatingall suspicious and fraudulent activities as they relate toinsurance; the OFIG has a concurrent mandate to investigate onlythose activities that relate to workers' compensation fraud. UnlikeNYSID, OFIG also has authority to oversee the self-insured trustscomposed of public and private employers. (New York employers havethree options for workers' compensation coverage: private insurancecarriers, the State Insurance Fund, or self-insurance.)

Given their differing areas of responsibilities, NYSID and OFIGmaintain separate databases. NYSID's database consists of themandatory reporting of suspicious and fraudulent activities bycarriers and whistleblowers; the OFIG database identifies anemployer's workers' compensation coverage by carrier, withattendant history.

Nonetheless, the report stated that increased cooperation anddata sharing among the various offices and agencies has led todecreased duplication of services and stronger fraud prevention. Itnoted that the OFIG and NYSID combined efforts resulted inreferring almost 300 cases for prosecution.

OFIG-specific data cited in the report showed that in 2008 theoffice:

? Identified 1,534 cases for investigation;

? Closed 2,865 cases (including cases from prior years);

? Detected $3,591,074 in fraudulent actively;

? Prevented $4,644,123 in fraud, i.e. funds the insurancecarriers had set aside to pay claimants that they no longer need toset aside because of the discovery of the fraud;

? Returned $1,212,354 in restitution to victims; and

? Imposed $321,207 in fines.