CA Workers' Comp Fraud Syndicates are Harder to Catch Than the Mafia. Here's Why

They don't have a boss. They don't have a chain of command. Half of them have never met each other — and that's exactly how it's designed.
San Bernardino Deputy DA Michael Chiriatti breaks down why California's workers' comp fraud networks are deliberately fragmented — multiple hubs, multiple spokes, rabbits at the bottom of rabbit holes who don't even know other rabbit holes exist. One colonel over here, another major over there, separate armies, no shared map.
That's not a flaw in their operation. That's the strategy. And it's why investigators can't just find the top and work down.
🎙️ Full episode on Fraudcraft — on YouTube & wherever you listen to podcasts.
🔔 Subscribe free
👍 Like if this opened your eyes
💬 Comment your questions — Michael is coming back
Proceeds support Joshua Tree No Kill Animal Shelter & Stray Cat Alliance
#fraudcraft #caworkerscomp #insurancefraud #truecrime #lawenforcement

Transcript

SPEAKER_00 0:00

I know for a fact what you're going to say. When you came into the insurance fraud unit, there was not a book sitting on your table saying, Mike, follow, you know, follow this path, you know? Like this is what all these, this is what it looks like on the street, because you you have to truly know and understand what's happening on the street. What is capping really? You know, is it just the business cards? Is it the phone calls? Now it's the AI bots calling people and signing them up for WorldCom claim. What's all behind it? There's SIBTF and there's all these other benefits with that is truly driving this fraud. So many layers, almost too much, really. So the fact that here you are, you're coming into the insurance fraud unit. Uh, you weren't taught it in law school. There's no book sitting on your desk. And there is an organized crime element to all this. Can you talk about all that?

SPEAKER_01 0:47

Can you I think there's talking specifically about that segment of work comp fraud that goes beyond the claimants, it goes beyond the employers who may be committing premium fraud. It's a concerted effort to get paid by the insurance carriers for not doing what the system was designed to do, and that's get people back to work. And I I agree with you. I think the organized crime analysis that you that you give, um, and I've seen you speak on this many, many times, the organized crime analysis is a really strong one. But from my experience, though it rises to the same level that let's say some of the Italian mob families, some of the cartels things that they might engage in. Um the the people that traditionally commit the organized crime, personally, in my experience, I think it's more akin to disorganized crime. And the reason why I say that is because what makes some of these fraudsters so difficult to catch and to prosecute is that there are so many different co-conspirators out there, but truly none of the co-conspirators other than one or two actually know each other because there are so as we as we say during a uh provider fraud investigation, there are so many different rabbit holes to run down when you're looking at a fraud type scenario. The rabbits living at the bottom of one rabbit hole might not even know that other rabbit holes exist. And if they do know the rabbit holes exist, they have no idea which rabbits are living in the bottom of those holes. Tina, when you're trying to bring down capping industry or some sort of provider that's in some sort of organized scheme to defraud uh the work comp system in California, one of the things you want to do is always map it out, right? So you find out who's in the center and then you spoke it out. Okay, when you spoke it out. The reason why, and if it was just one hub and a bunch of spokes, it would be less complicated. And I think the organized crime analysis is perfect. But usually it's a hub with some spokes, but many times one of those spokes goes to another hub with a bunch of different spokes, and out of those spokes go another hub to another hub. And so I really think we find ourselves in a situation where you've got a bunch of different players all trying to use the same people, being the claimants, um, or the same insurance carriers, but they're all attacking or they're all committing the fraud differently. And maybe A might know who B is, but A's not going to know who fraudster C is, and C might know who F is, but F doesn't know who D is, and they're all trying to defraud the system somehow. And so, yes, it is very much so like an organized crime ring, but I kind of look at it more of disorganized crime. It is as problematic as an organized crime syndicate, but one of the problems that we run into, it is not organized as neatly as a traditional organized crime type syndicate. Instead of having one general and then your foot soldiers and things like that, you've got maybe a colonel here doing his own thing, and that colonel might be talking to a major over there, and he's got his own army doing his own things, and they might not even know that that other colonel has two other sergeants working over here doing something completely different. It's all part of the same enterprise. It's just not organized neatly, which, to their credit, makes it a lot harder to investigate and to figure out exactly what's going on. Probably the reason they do it that way.