BILL REQ. #:  S-1324.2 

READ FIRST TIME 02/21/03.   

     AN ACT Relating to false industrial insurance claims; amending RCW 51.48.020 and 51.48.270; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 51.48.020 and 1997 c 324 s 1 are each amended to read as follows:
     (1)(a) Any employer, who knowingly misrepresents to the department the amount of his or her payroll or employee hours upon which the premium under this title is based, shall be liable to the state for up to ten times the amount of the difference in premiums paid and the amount the employer should have paid and for the reasonable expenses of auditing his or her books and collecting such sums. Such liability may be enforced in the name of the department.
     (b) An employer is guilty of a class C felony, if:
     (i) The employer, with intent to evade determination and payment of the correct amount of the premiums, knowingly makes misrepresentations regarding payroll or employee hours; or
     (ii) The employer engages in employment covered under this title and, with intent to evade determination and payment of the correct amount of the premiums, knowingly fails to secure payment of compensation under this title or knowingly fails to report the payroll or employee hours related to that employment.
     (c) Upon conviction under (b) of this subsection, the employer shall be ordered by the court to pay the premium due and owing, a penalty in the amount of one hundred percent of the premium due and owing, and interest on the premium and penalty from the time the premium was due until the date of payment. The court shall:
     (i) Collect the premium and interest and transmit it to the department of labor and industries; and
     (ii) Collect the penalty and disburse it pro rata as follows: One-third to the investigative agencies involved; one-third to the prosecuting authority; and one-third to the general fund of the county in which the matter was prosecuted.
     Payments collected under this subsection must be applied until satisfaction of the obligation in the following order: Premium payments; penalty; and interest.
     (2)(a) Any person claiming benefits under this title, who knowingly gives false information required in any claim or application under this title ((shall be)) is guilty of a class C felony((, or gross misdemeanor in accordance with the theft and anticipatory provisions of Title 9A RCW)) unless (b) of this subsection applies.
     (b) Any person claiming benefits under this title, who knowingly gives false information required in any claim or application under this title is guilty of a class B felony if the benefits received exceed by one thousand dollars or more the lesser of the benefits actually due or the benefits which, but for the false information, would have been authorized.
     (c) Upon conviction under either (a) or (b) of this subsection, in addition to any other penalties imposed, the person shall be ordered by the court to pay restitution to the entity from which the excess benefits were received in the amount of the excess benefits received, a penalty in the amount of one hundred percent of the excess benefits received, and interest on the excess benefits and penalty from the time the benefits were paid to the date the person repays the benefits and penalty. The court shall:
     (i) Collect the excess benefit payment and interest and transmit it to the entity from which the excess benefits were received; and
     (ii) Collect the penalty and disburse it pro rata as follows: One-third to the investigative agencies involved; one-third to the prosecuting authority; and one-third to the general fund of the county in which the matter was prosecuted.
     (d) Payments collected under this subsection must be applied until satisfaction of the obligation in the following order: Excess benefit repayment; penalty; and interest.

Sec. 2   RCW 51.48.270 and 1987 c 470 s 2 are each amended to read as follows:
     ((Any)) (1) A person, firm, corporation, partnership, association, agency, institution, or other legal entity, but not including an injured worker or beneficiary, ((that)) shall not:
     (((1))) (a) Knowingly make((s)) or cause((s)) to be made any false statement or representation of a material fact in any application for any payment under this title; or
     (((2))) (b) At any time knowingly make((s)) or cause((s)) to be made any false statement or representation of a material fact for use in determining rights to such payment, or knowingly ((falsifies)) falsify, conceal((s)), or cover((s)) up by any trick, scheme, or device a material fact in connection with such application or payment; or
     (((3))) (c) Having knowledge of the occurrence of any event affecting (((a))) (i) the initial or continued right to any payment, or (((b))) (ii) the initial or continued right to any such payment of any other individual in whose behalf he or she has applied for or is receiving such payment, conceal((s)) or fail((s)) to disclose such event with an intent fraudulently to secure such payment either in a greater amount or quantity than is due or when no such payment is authorized((;
shall be guilty of a class C felony: PROVIDED, That the fine, if imposed, shall not be in an amount more than twenty-five thousand dollars, except as authorized by RCW 9A.20.030)).
     (2)(a) A person who violates subsection (1) of this section is guilty of a class C felony unless (b) of this subsection applies.
     (b) If one or more false statements, representations, concealments, or failures to disclose made in violation of subsection (1) of this section result in payments that exceed by one thousand dollars or more the lesser of payments that are actually due or the payments which, but for the false information, would have been authorized, any person responsible for any such statement, representation, concealment, or failure is guilty of a class B felony.
     (3)(a) Upon conviction under subsection (2)(a) or (b) of this section, in addition to any other penalties imposed, the person shall be ordered by the court to pay restitution to the entity from which the excess payments were received in the amount of the excess payments received, a penalty in the amount of one hundred percent of the excess payments received, and interest on the excess payments and penalty from the time the payments were made to the date the person repays the payments and penalty. The court shall:
     (i) Collect the excess payment and interest and transmit it to the entity from which the excess payments were received; and
     (ii) Collect the penalty and disburse it pro rata as follows: One-third to the investigative agencies involved; one-third to the prosecuting authority; and one-third to the general fund of the county in which the matter was prosecuted.
     (b) Payments collected under this subsection must be applied until satisfaction of the obligation in the following order: Excess payment repayment; penalty; and interest.