EL CENTRO/SAN FRANCISCO -- Imperial Valley County Superior Court Judge Poli Flores ordered an employee of an El Centro hay exporter to pay $45,996 in restitution to the State Compensation Insurance Fund in a workers’ compensation insurance fraud case.  Judge Flores also sentenced Jose D. Estrada, a machine operator at Kuhn Hay in El Centro, to 5 years formal probation, after he pleaded guilty to one count of felony workers’ compensation insurance fraud.  Estrada earlier this week paid State Fund $18,000 as part of the total restitution.  He was also ordered by the court to pay a $100 fine.

Mr. Estrada reported an injury to his right ankle when he was struck from behind by a fork lift while at work in April 2003. The fraud was later discovered by his employer in September of that year when he saw Estrada walking without an orthopedic boot that he was supposed to be wearing for his injury. The employer called State Fund that same day and an investigation was launched.

State Fund hired a private investigator to do sub Rosa surveillance of Estrada, and shortly thereafter, the investigator filmed Estrada at his home and then driving to a physical therapy appointment.  Mr. Estrada did not wear the orthopedic boot at home or on his drive. When he arrived at the physical therapist’s office, he put on the boot in the parking lot. He also used a cane when walking into the appointment. After the appointment, he took off the boot in the parking lot. State Fund concluded that Estrada was wearing the orthopedic boot and using the walking cane to his various health care appointments for the purpose of exaggerating his alleged ankle injury.

After completing its investigation, State Fund turned over its suspected fraud case to the Imperial County District Attorney’s Office for review. The Department of Insurance (CDI) also assisted in the investigation.  The DA’s office charged Estrada with three counts of Insurance Code 1871.4 of which Estrada pleaded no contest to one count.

“This case demonstrates State Fund’s determination to investigate and fight fraud at all levels,” said Darlyn Regan, Manager of State Fund’s Fraud Investigation Program (FIP). “Workers’ compensation fraud costs the California's workers’ compensation system of millions of dollars each year and cannot be tolerated.”

Kuhn Hay, Estrada’s employer, was insured by State Fund from 2000 until 2004. 

State Fund’s Fraud Investigation Program (FIP) addresses all aspects of workers’ compensation insurance fraud, including employee, employer, medical and legal. In the last decade, State Fund’s FIP has produced hundreds of arrests and convictions in a wide range of workers’ compensation cases, including some considered milestones in California’s fight against fraud.

Editor’s Note: Established by the California Legislature in 1914, State Compensation Insurance Fund is a nonprofit, and wholly self-supporting public enterprise carrier that provides workers ’ compensation coverage at cost to all California employers.