Southern California Magnate’s Arrest Puts Would-Be North Carolina Workers' Compensations Scam Artists on Notice
On August 20, the California Department of Insurance (CDI) reported that a Southern California resident named Joseph Baiden (56) had been arrested in conjunction with a massive workers’ compensation scam. Baiden, who surrendered to LA Superior Court, had an arrest warrant out on him stemming from allegations that he had deliberately underreported his workers’ compensation payroll numbers to reduce his insurance premiums. Over an eight year period, from 2001 to 2007, he allegedly cost his insurer, State Fund, around $1.4 million. North Carolina workers’ compensation insurers have taken notice of the case, and no doubt the outcome will dramatically influence local NC policies, procedures and safeguards.
The size and scope of the charges against Baiden have attracted attention from local and national media. The CA state insurance commissioner, Steve Poizner, broke the story personally. If the defendant is convicted of fraud, he could face up to 40 years in jail in addition to fines of well over $3.2 million. The California Department of Insurance has frozen Baiden’s bank accounts and seized five of his Southern California properties, including an exclusive estate in the posh Diamond Bar neighborhood.
One of the reasons why the CDI has come down so hard on the accused is that workers’ compensation fraud – whether it occur in North Carolina or elsewhere – pads costs across the employment spectrum. When insurers can’t collect premiums, they either raise rates or reduce service, thus creating a cascade of bad effects for employers and employees alike.
AP, Calif. man accused of cheating workers comp fund, August 21, 2009
Pasadena Star News, Diamond bar man suspected of fraud, properties seized, August 19, 2009
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Steve Poizner
California Department of Insurance
