Insurance Agent Sentenced in Comp Fraud Case
The Washington state Attorney General's Office prosecuted the case as an aggravated offense because it happened over a long time and involved multiple acts as well as the loss of a large amount of money.
The Washington state Department of Labor & Industries (L&I) announced Nov. 27 that a Lake Stevens, Wash., man who ran his own insurance agency while claiming he was too disabled to work must serve 60 days in jail. James C. Kooy, 53, was sentenced Nov. 27 on one count of first-degree theft for wrongfully receiving more than $233,000 in workers' compensation payments from L&I; he had pleaded pleaded guilty to the felony charge in September 2017.
Judge Bruce Weiss also ordered Kooy to repay the state for an amount that will be determined at a hearing in March 2018.
"This case was truly outrageous. He worked for at least five years in his own business without telling us or his doctors," said Elizabeth Smith, assistant director of L&I's Fraud Prevention & Labor Standards. "By cheating to get cash benefits, he took money away from legitimately injured workers who really do need help to heal and get back to work."
L&I reported that its investigation determined Kooy owned and operated By the Lake Insurance Inc. at the same time he claimed to be too injured to work and was receiving workers' comp benefits. Over the five-year period that ended in April 2015, the investigation found his business generated more than $800,000 in revenue.
The Washington Attorney General's Office prosecuted the case as an aggravated offense because it happened over a long time and involved multiple acts as well as the loss of a large amount of money.
Kooy, who had earlier twisted his knee while working as a heavy equipment operator, began receiving partial wage replacement benefits from L&I in 2008. The agency said in June 2010, he opened his insurance agency, so L&I stopped providing the cash benefits. The department later reinstated the wage replacement checks after his lawyer said Kooy was unable to work and planned to sell the company, according to charging papers in the case. In 2015, L&I began investigating Kooy after receiving information that he did not sell the business and was likely working. The investigation found Kooy still owned the business and was selling insurance policies, attending business meetings, and personally communicating with clients and vendors. But he did not tell his doctors or vocational counselor he was working and falsely declared on L&I forms that he was not working. "Injured workers are sometimes eligible to receive limited replacement of their wages, if their doctor confirms they can't work because of the injury. Workers, however, must notify L&I if they do work," its release stated.