Feds step in to investigate potential fraud in Illinois workers' comp cases

News-DemocratApril 1, 2011 

Federal prosecutors have issued subpoenas to state agencies seeking workers' compensation documents, following News-Democrat stories that reported almost $10 million in workers' compensation payments at Menard Correctional Center.

The subpoenas, obtained by the Associated Press, were issued to the state Department of Corrections, the Illinois Workers' Compensation Commission and Central Management Services, which manages the insurance pool for state employees and decides whether claims are compensable and how much they are worth.

In December, the News-Democrat reported that nearly 389 Menard employees received $10 million from taxpayers for workers' compensation injuries. More than 230 claims were filed by guards for repetitive trauma damage to their wrists and elbows that were caused by locking and unlock cell doors.

"Any wrongdoing has got to be ferreted out," Gov. Pat Quinn said Thursday. "Number two, we've got to reform the whole law in Illinois. Next week we are going to be proposing a work comp reform that I think is good for workers as well as businesses across our state."

The subpoenas were issued in February by Assistant U.S. Attorney Bruce Reppert, who is based in the Southern District of Illinois, and Assistant U.S. Attorney Tim Bass, who is based in the Central District of Illinois.

The federal subpoenas sought documents including:

* Any email about workers' compensation claims made by employees of Menard Correctional Center or other state agencies.

* Email, personnel records, employee vouchers and reimbursements for CMS employee Susan Lemasters for the past five years. Lemasters decides workers' compensation settlements for Department of Corrections employees.

* Email and personnel records for Bill Schneider, the former Assistant Attorney General who handled the workers' compensation claim of Matt Mitchell -- the Illinois State Police Trooper who slammed into a car at triple-digit speeds while using his in-dash computer and talking on his cellphone. The crash killed Collinsville sisters Kelli and Jessica Uhl in November 2007.

* Email and personnel records for Workers' Compensation Arbitrators Andrew Nalefski, Jennifer Teague and John Dibble.

"The IWCC and CMS are cooperating fully with the investigation, and have no further comment at this time," said Alka Nayyar, the CMS and IWCC spokeswoman.

Prosecutors are seeking much of the same information obtained by the News-Democrat under the Illinois Freedom of Information Act, including emails to and from arbitrators Teague, Dibble and Nalefski, and CMS adjuster Lemasters.

Teague sent an email to her court reporter telling her she was trying to hold Mitchell's hearing "on the sly with no press." Teague also offered to set a special hearing date in a case if the Attorney General's office sped up resolution of her own repetitive trauma workers' compensation claim, as documented in a report from Illinois Attorney General Lisa Madigan's office.

Dibble handled most of the claims from Menard and received $48,790 in a workers' compensation case after he said he fell while walking up the steps at a Herrin hearing site.

Teague, of Shiloh, and Dibble, of Freeburg, are currently on paid leave. Neither could be reached for comment Thursday.

The federal probe is the latest investigation into the state's workers' compensation system.

The Illinois Department of Insurance is conducting an investigation and reviewing repetitive trauma claims filed by Menard guards and other prison personnel. Calls to the department's spokeswoman were not immediately returned.

House of Representative Speaker Michael Madigan introduced a bi-partisan resolution in February calling for an audit of the workers' compensation program for state employees.

Quinn appointed Springfield lawyer John R. Simpson to oversee the probe of Menard claims. That investigation is ongoing.

"We want to make sure that everything is done right when it comes to workman's compensation," said Quinn, who was in Belleville for a news conference about a building expansion at Southwestern Illinois College. "Those who are injured, we want to make sure they get fair compensation. At the same time, if there is any fraud, if there is any abuse, if there is any monkey business, if there's any wrongdoing, it's gotta be prosecuted."

Contact reporter Beth Hundsdorfer at bhundsdorfer@bnd.com or 239-2570. Contact reporter George Pawlaczyk at gpawlaczyk@bnd.com or 239-2625.

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