Companies Scammed in 2006 North Carolina Workers' Compensation Fraud Case to Collect $6.5 Million
In October, 2006, employers who had bought into a self-insured North Carolina workers’ compensation group fund got some terrible news. The Phoenix Fund’s reinsurance broker, a man named Thomas Raitz, had been engaging in complicated illegal shenanigans to steal from the fund via a money laundering and mail-fraud operation. Investigators from North Carolina’s Department of Insurance concluded that Raitz’s scheme impacted more than $20 million worth of the fund’s money.
Although Raitz was convicted in 2007 after pleading guilty and was subsequently sentenced to nearly 6 years in jail, members of the Phoenix Fund have yet to collect money and damages. Finally, in 2008, Raitz was ordered by the court to pay $19 million to reimburse the Phoenix Fund. To date, Raitz has paid out $18 million, of which $11.5 million has gone to meet the obligations of the fund itself and has not gone to remunerate individual employers. Only $6.5 million collected will be distributed among the injured parties. That said, the North Carolina Insurance Commissioner, Wayne Goodwin, released a statement that sounded a note of optimism for these employers, assuring the victims that they would “get back every available penny” owed to them.
Triangle Business Journal, North Caroilna employers to get $6.5M from Phoenix Fund, August 10, 2009
Workforce Management, Workers’ Compensation Fund Members Hit by Fraud Get Distributions, August 14, 2009
More Web Resources
North Carolina Insurance Commission
North Carolina’s Department of Insurance
