What’s Considered Fraud in a Workers’ Compensation Claim?

Suspicious Is Not the Same as Fraud

A suspicious claim is just that: suspicious.

Maybe the timing is odd. Maybe the injury does not seem to match the reported accident. Maybe the claimed limitations seem extreme. Maybe someone calls in a tip saying the claimant is working another job, going to the gym, boxing, lifting, doing construction, or otherwise living a very different life than what is being reported in the claim.

That does not automatically mean fraud.

Fraud is about intent. It is about the person knowingly misrepresenting the truth to receive benefits.

There is a major difference between:

• A person who is legitimately injured but has good days and bad days
• A person who exaggerates symptoms because they are scared, angry, or confused
• A person whose injury does not match the claimed accident
• A person who lies about their physical abilities to keep receiving workers’ compensation benefits

That last category is where fraud starts to come into focus.

Common Types of Workers’ Compensation Fraud

In my experience, the most common questionable workers’ compensation claims involve exaggerated injuries, injuries that do not align with the accident, malingering, and tips that the claimant is “working the system.”

The most common issues I see include:

• Claiming a serious injury after a minor or questionable accident
• Saying they cannot work while performing physical labor elsewhere
• Reporting limitations that do not match their daily activity
• Claiming back, neck, shoulder, knee, or extremity injuries that appear inconsistent on surveillance
• Filing a claim immediately after workplace discipline, conflict, or termination
• Exaggerating pain levels or disability to extend benefits
• Hiding second jobs, side work, or physical hobbies
• Saying they cannot lift, bend, carry, drive, stand, walk, or work, while video shows otherwise

Back injuries are especially common because pain is subjective. You cannot look at someone and know exactly how much pain they are in. That is why the investigation has to focus on activity, consistency, and facts.

Surveillance does not prove someone is pain-free. It can show whether their real-world activity matches what they are claiming.

The Red Flags I Pay Attention To

One of the biggest workers comp red flags is timing.

When there are issues of temperament, workplace hostility, disciplinary action, performance reviews, or conflict with management, and then a workers’ compensation claim is filed shortly after an outburst, I pay attention.

That does not mean the claim is fake.

But when the claim is extreme, the accident is vague, the job duties are not physically demanding, and the claimant suddenly becomes “unable to work” right after a workplace blowup, that is a fact pattern worth investigating.

In the field, these are often viewed as retaliation claims.

The pattern usually looks something like this:

• The employee is already having problems at work
• There is a confrontation, write-up, review, suspension, or termination
• A claim is filed almost immediately after performance review or confrontation.
• The employee gets angry or threatens to quit
• The claimed injury is severe compared to the job duties or incident
• The claimant reports major physical restrictions
• A tip comes in that the claimant is doing much more than they admit

Again, none of that proves fraud by itself.

But it gives the attorney, adjuster, employer, or investigator a legitimate reason to start asking better questions.

A Real-World Case Example

One case involved a young man who wanted to become a boxer.

At work, his job was not physically demanding. He sat at a counter and assisted customers. He was not loading trucks, climbing ladders, crawling under houses, or doing heavy labor. He was sitting and talking with customers.

Over time, he became increasingly hostile toward management and ownership. When management gave him a performance review, he lost his temper, threatened violence, and walked off the job.

Almost immediately, he sought medical treatment for his back and extremities. He claimed he was unable to work.

Several things made the claim suspicious.

He was young. He was physically fit. He was training in boxing at a semi-professional level. His actual job duties were light. The claim came right after a hostile workplace incident. The claimed injuries and limitations did not seem to line up with the work he had been doing.

So surveillance was conducted.

What we captured was not a guy barely able to move. We obtained approximately three hours of video of him performing intense gardening work. He was shoveling, using a hoe, raking, carrying heavy trash cans, lifting large bags of foliage, and performing physical labor that did not match the picture being painted in the claim.

That is the difference between suspicion and evidence.

Before surveillance, there were red flags. After surveillance, there was documentation.

Why Surveillance Matters in Workers’ Compensation Claims

Surveillance is not about harassing people. It is not about catching someone walking to the mailbox and pretending that proves fraud.

Good surveillance is about documenting meaningful, relevant activity.

If a claimant says they cannot bend, lift, carry, squat, stand, walk for long periods, drive, or use their arms, then video of them doing those exact things can matter. Not because one clip proves everything, but because it gives the defense, carrier, employer, or attorney something objective to evaluate.

What Employers and Adjusters Get Wrong

Here is where I will be blunt. Do not assume every claim is legitimate. That may not be politically correct, but it is reality. California, and especially Los Angeles and Orange County, are expensive places to live. People are under financial pressure. Some claimants understand that workers’ compensation is a no-fault system. Some also know that if they get caught exaggerating or working while claiming disability, the case may simply get dropped or reduced.

Fraud prosecutions can be difficult, especially in Los Angeles. That reality affects behavior.

Some people know the system is hard to enforce and they take advantage of it.

At the same time, employers and adjusters should not assume every suspicious claim is fraud. That is lazy thinking. A legitimate injury can still have messy facts. An angry employee can still get hurt. A delayed claim can still be real. A person with a back injury can still bend occasionally. Human beings are not robots.

The smarter approach is this:

• Do not assume fraud
• Do not assume legitimacy
• Look at the facts
• Compare the claimed injury to the accident
• Compare the claimed limitations to the job duties
• Compare the medical restrictions to real-world activity
• Give the investigator the right background before surveillance begins

The more information the investigator has, the better the investigation will be.

Why Background Information Matters Before Surveillance

Legal Surveillance investigations are much more effective when the investigator knows what actually matters.

A vague assignment like “see what he does” is typical but a useful assignment includes:

• The claimed injury
• The reported date of injury
• The job duties
• The claimant’s restrictions
• The activity the claimant says they cannot perform
• Any known hobbies, side work, vehicles, addresses, routines, or social media clues
• Any workplace conflict or disciplinary history
• Any specific tips received
• Upcoming medical appointments, depositions, or hearings

If the person claims they cannot lift more than ten pounds, the investigator needs to know that.

If the person claims they cannot drive, bend, stand, walk, use one arm, or perform repetitive movement, the investigator needs to know that too.

Otherwise, important activity may be missed or undervalued.

The goal is not just to get video. The goal is to get relevant video.

Examples of Conduct That May Point Toward Fraud

Workers’ compensation fraud can take many forms, but in claimant investigations, the most common red flags involve intentional misrepresentation.

Examples may include:

• Claiming an injury happened at work when it did not
• Exaggerating the severity of an injury to obtain benefits
• Saying they cannot work while secretly working elsewhere
• Denying physical activity that surveillance later confirms
• Failing to disclose a prior injury or condition
• Claiming disability while performing heavy labor
• Misrepresenting symptoms to doctors
• Staging or fabricating an accident
• Continuing to collect benefits after returning to work
• Coaching others to support a false version of events

The key issue is not whether the person is imperfect. The key issue is whether they intentionally lied to obtain benefits.

That is the line.

The Role of Intent in Workers’ Compensation Fraud

Intent is what separates a bad-looking claim from a fraudulent one.

A claimant may be wrong about their pain level. They may be emotional. They may be angry at the employer. They may even overstate certain symptoms. That does not automatically mean they committed fraud.

But when someone knowingly claims they cannot work, cannot lift, cannot bend, or cannot perform basic physical activities while privately doing those same things, that is where the case changes.

Fraud is not about being injured and still having some ability.

Fraud is about lying.

That is why surveillance, background investigation, witness information, medical records, and claim history all matter. One piece of evidence may raise a question. Several pieces together can show a pattern.

What Attorneys and Insurance Carriers Should Look For

Attorneys and insurance carriers should look for inconsistencies, not just inconvenience. A claim is not suspicious just because it costs money. Workers’ compensation claims cost money by nature. The better question is whether the facts align or not.

Look at:

• The mechanism of injury
• The job duties
• The timing of the claim
• The medical complaints
• The claimant’s age and physical condition
• Prior claims or similar complaints
• Workplace conflict before the claim
• Do injuries align with the accident
• The claimant’s reported restrictions
• Social media or public activity
• Tips from coworkers, neighbors, or employers
• Whether the claimant is working elsewhere

When several of those factors point in the same direction, surveillance can be extremely valuable.

What Surveillance Can and Cannot Prove

Surveillance can show what a person does.

It cannot read minds. It cannot diagnose pain. It cannot prove what someone felt in a specific moment. It cannot automatically turn a suspicious claim into a criminal fraud case.

What it can do is document behavior.

That documentation can help answer important questions:

• Is the claimant as limited as they claim?
• Are they performing activities inconsistent with their restrictions?
• Are they working another job?
• Are they doing heavy labor while claiming disability?
• Are their movements natural or guarded?
• Is the claimed injury consistent with observed behavior?

The value is in the comparison.

What did they claim? What did the records say? What does the video show?

That is where the truth usually starts to come out.

My Opinion After Years of Surveillance Work

Here is my opinion after decades in this business: workers’ compensation fraud is real, but calling everything fraud is reckless.

There are legitimate injured workers who deserve benefits. There are also people who see the system as an opportunity. Both things can be true.

The mistake is taking a side before the facts are developed.

If you are an employer, attorney, or adjuster, do not rely on gut feelings alone. A bad attitude does not prove fraud. A claim after discipline does not prove fraud. A person being unlikeable does not prove fraud.

But when the timing is suspicious, the claim is extreme, the job was not physically demanding, the injury does not align with the accident, and the claimant is seen doing things they claim they cannot do, you have a problem worth investigating.

That is where surveillance earns its keep.

Final Takeaway

Workers’ compensation fraud is not simply a questionable claim. It is an intentional lie made to obtain benefits.

A suspicious claim deserves scrutiny. A fraudulent claim requires layers of evidence.

The most useful investigations focus on facts, not assumptions. They compare what the claimant says with what the claimant actually does. When those two things do not match, the case becomes much clearer.

In workers’ compensation investigations, the truth is usually not found in one dramatic moment. It is found in the pattern.

And when that pattern shows someone claiming disability while living a very different physical reality, the video usually speaks for itself.