federal workers' compensation fraud investigations

Welcome to Spodek Law Group. Our goal is to give you the reality of federal workers' compensation fraud investigations - not the sanitized version other lawyers present, not the administrative-penalty fiction, but the actual truth about what happens when the Office of Inspector General decides you've been defrauding your own employer. And here's the thing most federal employees don't grasp until it's far too late: the government you work for is the same government that investigates you, prosecutes you, and has complete access to every database, every form you've signed, and every hour of surveillance footage they've been collecting while you thought you were getting away with something.

The Federal Employees' Compensation Act (FECA) provides workers' compensation benefits to federal employees injured on the job. The program is administered by the Department of Labor's Office of Workers' Compensation Programs (OWCP). When you file a claim, you're entering a system designed to help legitimately injured workers. But when you lie on those forms - when you claim a disability you don't have or fail to report income you're earning - you're committing federal crimes. Not administrative violations. Not civil matters. Federal felonies that carry prison sentences measured in years, not months.

What makes FECA fraud cases different from any other workers' compensation fraud is the unique position of federal employees. You're not defrauding some private insurance company that has to hire investigators and hope to catch you. You're defrauding the same entity that employs you, pays your salary, controls your personnel records, has access to IRS databases showing your tax filings, can query Social Security earnings records, and can coordinate with multiple Offices of Inspector General across dozens of federal agencies. There is no hiding from an employer who runs the entire information infrastructure of the United States government.

The Trap Most Federal Employees Dont See Coming

Heres the thing about FECA fraud investigations that nobody tells you until your facing charges. The Office of Inspector General doesnt rush. They dont make contact the moment they suspect something. They open a file, they start pulling records from databases you didnt even know existed, and they watch. For years. The average FECA fraud investigation runs two to five years before any contact with the target. By the time an OIG agent calls you or shows up at your door, they have already built the case that will convict you.

Think about that for a moment. Every annual CA-1032 form you've submitted claiming you had no outside income - they've already cross-referenced it against IRS records, Social Security earnings data, and the National Directory of New Hires. Every time you claimed you couldnt perform certain physical activities - they may have months of surveillance video showing you doing exactly those things. Every witness who saw you working that side job or running that business, they've already been interviewed. The investigation you think hasnt started yet? Its probably been going on for years.

The Federal Employees' Compensation Act requires claimants receiving benefits to submit a CA-1032 form at least every 15 months. This form asks whether youve had any employment or earnings during the past 15 months. It asks about volunteer work. It asks about self-employment. And heres were most people seal there own fate: they lie on these forms without understanding that each form is a sworn statement under penalty of perjury. Each false CA-1032 is a seperate federal offense. If youve been collecting fraudulent benefits for five years, thats not one crime - its potentialy five or more distinct felony charges.

What the CA-1032 Form Really Does

Most federal employees view the CA-1032 as paperwork. A bureaucratic box to check. They dont realize their filling out the prosecution's evidence file with there own hands.

When you sign a CA-1032 certifying that you had no employment or earnings, you're making a statement under 18 U.S.C. § 1920 - the federal statute that makes it a crime to knowingly make false statements or conceal facts in connection with a claim for FECA benefits. The maximum penalty is five years in federal prison. But that's just the FECA fraud statute. If the amount of benefits you fraudulently obtained exceeds $1,000, you can also be charged with theft of government funds under 18 U.S.C. § 641, which carries a maximum sentence of ten years.

Let that sink in. Each form, each year, each false statement is a seperate potential charge. Prosecutors dont have to prove you commited some elaborate scheme. They just have to prove you lied on a form you signed. And you gave them that evidence yourself.

The irony that should terrify every federal employee considering FECA fraud is this: the same forms that approve your benefits become the documents that convict you. Your signature on the CA-1032 is an admission that you understood what you were certifying. Your failure to report income isnt an oversight - its a federal crime documented in your own handwriting.

How OIG Builds a Case While Your Thinking Your Safe

Heres the reality of how these investigations actualy work, based on what practitioners who handle these cases see every day. The DOL Office of Inspector General recieves a tip - maybe from a coworker who knows your not really disabled, maybe from an ex-spouse angry about something else entirely, maybe from automated database matching that flags a discrepancy. They dont come knocking. They open a file.

The first phase is records collection. They pull every CA-1032 youve ever submitted. They request your medical records from OWCP. They subpoena tax returns from the IRS. They query the National Directory of New Hires to see if youve had any reported employment. They check Social Security earning records. They may even check your spouses tax returns if there's suspicion of income being hidden through a family member. All of this happens without you knowing anything.

The second phase is surveillance. If the database evidence suggests fraud, they'll assign investigators to watch you. Not for a day or a week. For months. They're documenting your daily activities, your physical capabilities, your comings and goings. They're looking for the gap between what you claimed you cant do and what they can prove you actualy do.

The third phase is witness interviews. Neighbors, former coworkers, business associates, anyone who might have information about your actual condition or outside income. These interviews are voluntary, but most people talk freely to federal agents, especialy when they dont realize their providing evidence against someone else.

Only after all of this - after years of silent evidence gathering - does OIG make contact. By then, they have video, they have documents, they have witnesses, and they have your own signed statements contradicting all of it.

The Video They Already Have of You

In the Elizabeth Torres case, a former Bureau of Prisons corrections officer collected FECA benefits for approximatly ten years claiming she had a debilitating knee injury that essentially prevented her from working. What Torres didnt know was that investigators had been watching. They documented her working full-time at a drug and alcohol addiction treatment center from roughly 2015 through 2019 - while she continued filing CA-1032 forms claiming she couldn't work.

But heres the kicker. Investigators captured video of Torres dancing in high-heeled boots on the sidewalk outside the clinic.

Think about that image for a second. She spent a decade convincing OWCP she couldnt work due to a knee injury. Meanwhile, federal agents were filming her dancing. In heels. That video became courtroom evidence.

Torres pleaded guilty to federal workers' compensation fraud. She faces up to five years in federal prison. And she has to repay hundreds of thousands of dollars in benefits she fraudulently recieved over the course of a decade. One video, ten years of lies, career destroyed.

As Todd Spodek explains to clients facing FECA fraud allegations, the surveillance evidence is often overwhelming by the time charges are filed. The government doesnt bring cases based on suspicion - they bring cases based on video that directly contradicts your sworn statements. Thats not a case you can fight with explanations and excuses. Thats a case where your fighting to minimize damage, not prove innocence.

The Database Network You Cant Hide From

Federal employees sometimes think they can avoid detection by keeping side income off the books. Cash payments. Work for friends and family. Informal arrangements that wont show up anywhere. This fundamentaly misunderstands the investigative resources available to federal agencies.

The National Directory of New Hires is a federal database that collects information on new employees from all employers in the United States. Every time youre hired anywhere - even part-time, even temporary - its reported. The IRS maintains records of every W-2 and 1099 issued with your Social Security number. State employment records are accessible to federal investigators. Even Uber, Lyft, and other gig economy payments are reported on 1099s.

OK so maybe you really did keep everything off the books. No formal employment, no 1099s, pure cash. You still have a problem. Social media. Bank deposits. Lifestyle inconsistent with your claimed disability and sole income of FECA benefits. Witnesses who saw you working. The neighbor who noticed you werent home during the day. The customer who can identify you from the business you claimed not to have.

The databases that can catch you arent just employment records. There financial records, social security records, even records from other federal benefit programs. When multiple OIGs coordinate - and they do, especialy in major fraud cases - your facing investigative resources you simply cannot evade.

Where FECA Fraud Investigations Actually Begin

Most federal employees charged with FECA fraud never understand how the investigation started. They assume someone filed a complaint or that OWCP got suspicious. Sometimes thats true. But increasingly, the trigger is automated.

The Department of Labor runs regular data matches comparing FECA claimant information against other federal databases. When your FECA file says you have no employment income, but IRS records show W-2s or 1099s in your Social Security number, that discrepancy generates a flag. Nobody has to report you. The computers do it automaticaly.

Other common triggers include anonymous tips to the OIG hotline - and the most common tipsters are ex-spouses during divorce proceedings, disgruntled coworkers, and neighbors who notice your working when your supposed to be disabled. Social media posts showing physical activity inconsistent with claimed injuries. Insurance company data sharing when you file a separate claim. Even routine OWCP case reviews that find inconsistencies in your medical documentation.

The point is this: you dont get to know how the investigation started. By the time your aware of it, the origin is irrelevant. What matters is that their already building the case against you, and you need to respond strategicaly rather then reactively.

Why Being Too Small Wont Save You

Theres a dangerous myth that OIG only goes after big fraud cases. That if your just collecting an extra ten or twenty thousand per year, your not worth the investigative resources. This is completly wrong.

In the Manhattan FECA fraud case, the U.S. Attorney announced charges against 11 defendants - ten United States Postal Service employees and one other federal employee. These werent masterminds running million-dollar schemes. These were individual employees who claimed disabilities while running side businesses or working other jobs. They were charged with theft of government funds (up to 10 years) and federal workers' compensation fraud (up to 5 years). Combined, they faced up to 15 years each.

Heres were it gets interesting. They were prosecuted together. Not because they conspired, but because DOJ batches similar cases for efficency and deterrence. Your "small" fraud case becomes part of a larger prosecution initiative. Your sentencing happens in the context of a publicized crackdown. Your case becomes an example.

At Spodek Law Group, weve seen this pattern repeatedly. The government isnt looking for the biggest cases - their looking for the most provable cases. And FECA fraud, with its mandatory forms and documented lies, is extremly provable. The signed CA-1032 is all they need to establish the false statement. The database match proves the unreported income. Your case might be small, but its also airtight.

What Happens After Your Charged

The consequences of a FECA fraud conviction cascade far beyond the immediate criminal penalty. Federal employees facing these charges need to understand the full scope of what their risking.

First, there's the criminal sentence. Under federal sentencing guidelines, FECA fraud (18 U.S.C. § 1920) carries up to five years per count. Theft of government funds (18 U.S.C. § 641) adds up to ten years. With multiple CA-1032 violations, prosecutors have multiple counts to work with. Federal prison time is real and likely if the fraud amount is significant.

Second, theres restitution. You will be ordered to repay every dollar of benefits you fraudulently recieved. If you collected benefits for years, this could be hundreds of thousands of dollars. This debt does not go away in bankruptcy. It follows you forever.

Third - and this is what devastates career federal employees - conviction means immediate termination and permanent bar from federal employment. Not just your current job. Any federal job, ever again. Your security clearance is revoked permanently. Many state and local government positions will also be closed to you with a federal fraud conviction.

Fourth, if you were vested in the Federal Employees Retirement System (FERS), conviction for fraud committed while employed may result in forfeiture of your pension. Decades of service, gone.

Fifth, the collateral consequences in your personal life. A federal fraud conviction affects housing applications, loan applications, professional licenses, child custody determinations. The ripple effects touch every aspect of your life.

This is the consequence cascade that Todd Spodek walks clients through when they first come to Spodek Law Group facing FECA allegations. Its not just about avoiding prison - though thats obviously critical. Its about understanding the total destruction a conviction represents and fighting strategicly to minimize every component of that damage.

The Investigation Youve Already Triggered

Maybe your reading this because you've already recieved contact from OIG. Maybe an investigator called you. Maybe you recieved a letter. Maybe your agency's HR department asked some uncomfortable questions.

Heres what you need to understand: if they've contacted you, the investigation has been going on for some time already. They have documents. They may have surveillance. They've almost certainly cross-referenced your CA-1032s against databases. The contact isn't the beginning of the investigation - its the beginning of the endgame.

What you do in the next 48 hours matters enormously. Most people make critical mistakes at this stage. They talk to investigators thinking they can explain away discrepencies. They cant. Everything you say is being documented and will be used against you. They destroy records thinking this helps. It doesnt - it adds obstruction charges to fraud charges. They contact coworkers or witnesses. This can become witness tampering.

The single most important thing you can do is invoke your right to counsel immedietly and say nothing else. Not "let me explain." Not "I think theres been a misunderstanding." Nothing. You have the constitutional right to consult with an attorney before answering any questions from federal investigators. Use it.

What You Should Do Right Now

If your a federal employee who has been less than truthful on CA-1032 forms, who has unreported income, who has exaggerated a disability, or who suspects you may be under investigation, the window to act strategicly is not infinite. It may already be closing.

Early intervention matters enormously in FECA fraud cases. An experienced federal criminal defense attorney can assess your exposure, advise on your constitutional rights, potentially negotiate with prosecutors before charges are filed, and develop a defense strategy while options still exist. Waiting until charges are filed eliminates many of these strategic options.

The government has been building their case methodicaly, possibly for years. You need to start building your defense now.

Call Spodek Law Group at 212-300-5196. The consultation is confidential - attorney-client privilege protects everything you say. We can evaluate your situation, explain your options, and help you navigate what comes next. Whether that means negotiating a resolution, preparing for possible charges, or defending you at trial, you need experienced federal criminal defense counsel who understands how these cases actually work.

The clock started when they opened that file on you - possibly years ago, possibly last month. You may not know exactly when that was. But every day without legal representation is another day the government is building their case while your doing nothing to build yours. Every day without counsel is a day closer to charges you're not prepared for.

That window is closing. 212-300-5196 reaches someone who understands federal workers' compensation fraud defense. Use it.