July 28, 2021

Postal Worker Who Operated An Online Shop While Collecting Disability Benefits Charged With Worker’s Compensation Fraud. The Increasing Popularity Of Online Selling Platforms Creates Opportunities For Disability Fraud (Please note – the charges and accusations made against the defendant are merely accusations, and the defendant is presumed innocent until proven guilty.)

A Union County mail carrier who certified she had no outside employment while collecting federal benefits for a foot injury was charged with one count of fraud by the U.S. Attorney’s office for the District of New Jersey. Aida Perez was charged with one count of knowingly and willingly falsifying, concealing and covering up a material fact, and making a false, fictitious and fraudulent statement and representation in connection with her application for federal workers compensation benefits.

Perez signed and certified a form that she sustained an ankle sprain while performing her job duties, and in subsequent forms certified she did not receive earnings from employment outside of her federal job.  However, investigation revealed she was operating an online business from which she derived a substantial income.

While this is a federal complaint involving a federal employee, it evidences an often hard-to-detect source of employment/income for investigations concerning suspected fraud regarding receipt of temporary total or total permanent disability under the New Jersey Workers Compensation Act. Both benefits are paid as the result of a compensable injury rendering the worker unable to perform any gainful employment; look at such payments as wage replacements. Certainly, the operation of a profitable online store, while perhaps not involving strenuous manual labor, is a form of income generating activity. While an occasional online sale should probably not trigger an accusation of fraud, the recent growth of online businesses with substantial sales represents an area of concern for carriers and self-insureds making total disability payments.

The website “Statista” provides information regarding one such online service, Etsy. According to this website, in 2012 there were 830,000 active Etsy sellers. By 2020 the number had climbed to an estimated 4,365,000, with the majority, 62 per cent, based in the US. And this is just one online marketplace. eBay is even bigger. And, there are other online selling platforms.

Certainly an investigation of possible online shops or stores is not necessary or even practical in every claim involving total disability payments. The overwhelming majority of such recipients are honest and just want to get back to work if they can. But in those cases where fraud is suspected, the online marketplace should not be overlooked.

If you have any additional questions, comments or concerns about this topic or any other issues related to your worker’s compensation needs, please feel free to contact the worker’s compensation group here at Brown & Connery, LLP via email or call 856-854-8900.

By: Alfred P. Vitarelli, Associate at Brown & Connery, LLP