|LA's other Zen Master|
By Robert Warne - October 3, 2001
Since the Lakers repeat victory parade June 18, 2001, one might think that coach Phil Jackson is the only Zen Master in Los Angeles and that Kobe and Shaq are the only guys on a team in LA throwing down slam-dunks.
Well, just a few blocks away from the celebrations complete with Laker Girls and double decker buses at the Staples Center, out of the spotlight and behind the scene was Neal Leary, the City of Los Angeles’ special investigation unit "coach"—the chief fraud investigator for workers’ compensation. On the day of the parade, just as he’s done for the last three years, and continues to do, Leary was assembling slam-dunk cases for prosecution.
And much like Jackson’s mission, to draw respect and power from players so that they form the sacred bond of a team, Leary’s mission is similar. With a tone of modesty accented with poker face confidence, he said, "Combating fraud is a team effort. I’m not better than them and they’re not better than me. Together we’re the best."
Though his department may be small, from the amount of work Leary orchestrates as demonstrated by his file cabinets brimming with current files, one might think that he has a team of 100 specialists. A man with a wealth of resources, Leary draws on contacts, connections and the lessons he’s learned over the last 20 years in the insurance industry to manage his mountainous workload.
Seven days a week if necessary Leary is out piecing together what he calls "MILK" (materiality, intent, lie, knowledge). These are the crucial ingredients necessary to build a prosecutable case. Without MILK, Leary said, "it’s hard to convict."
Along with establishing MILK, "It is important to have a good relationship with the DAs." Over the years, Leary has worked with the Orange, Ventura and LA county district attorneys. The process that has worked best for him is to first take his cases to the Department of Insurance, who then takes the cases to the DA. When asked if he’s ever had trouble getting a DA to take one his cases, Leary said, "No. They like my cases because they are well put together."
LA City Attorney Lawrence Budzinski has been able to witness first hand the mvp role Leary plays. Budzinski said, “The depth and breadth of his expertise is unparalleled. The Office of the City Attorney for the City of Los Angeles works in close cooperation with Mr. Leary in the Workers Compensation Fraud and Recovery area. Due to our combined efforts we have been able to not only substantially increase the amount recovery of taxpayer dollars spent on workers compensation claims from responsible third parties but also identify and investigate potentially suspect claims.
“The key guiding principles here are education, vigilance, and fairness. The line adjusters need to continually be made aware of the potential for fraud, but must temper that with fairness. When facts suggest a claim may be somewhat suspect, that does not necessarily mean it is a fraudulent claim. That's where Neal so ably comes into the picture. He is as determined to find that there is no fraud in a claim as he is to say there is fraud. With his help we have been able to send the message out that whether the fraud is "soft" or "hard”, fraud is fraud—and also send the message that the city will fairly honor and pay bonafide employee workers compensation claims in a timely manner.”
Building a fraud case requires a lot of time, effort and investigation, explained Leary. "Aside from an enormous investment of time, it also takes money. Some insurance companies don’t want to prosecute fraud because of these facts. Another problem with some insurance companies is that they aren’t interested in employing experienced adjusters. So as a result of untrained adjusters and insurance companies not whole-heartedly pursuing fraudulent claims, many cases tend to be weak and unprosecutable."
To minimize expenditures associated with building a case, Leary takes the hands on approach and does the majority of the work himself. "I develop the case and I run the case. It’s cost effective to be in control of each case."
Many times to keep costs down, an investigator may be allotted eight hours to perform an activities check. "I use 5 seasoned investigators." These investigators fill Leary’s cabinets with videotapes, photographs and other pertinent pieces of information.
As if on cue, one of his five seasoned investigators dropped into the office. It was Dick Mason of Dick Mason Investigations in Culver City. Mason is one of Leary’s secret AOE/COE weapons. Leary said what’s good about Mason is that, "he’s very nice and polite and provides very detailed information and specializes in third-party subrogation."
The story of how Leary and Mason met while handling special claims at Transamerica is amazing. The special claims department handled files that ran the gamut from NBA to entertainment celebrity claims. They recounted a story when Mason had to go visit the Michael Jackson Neverland Ranch near Los Olivos to investigate a claim. Mason’s job was to determine whether a female worker was faking or had realistically sustained a back injury while cleaning up a giant pile of elephant dung.
When asked how most of his investigations are initiated he said, "I receive calls from employers, co-workers and vendors.
"Sometimes a co-worker will ring me up and say, ‘this guy is collecting injury on duty pay (IOD), but whatever his condition is, he sure isn’t showing any signs of pain bowling every night."
IOD from a self-insured entity like the City of LA is nothing to scoff at. An employee is entitled to 90% of their regular pay, tax-free for 261 days. Leary has observed many miraculous recoveries as the 261 days have drawn to a close. It isn’t unusual for an employee to abuse IOD, which in most cases adds up to more than the standard temporary disability $490 per week.
Moonlighting compounds the situation for an employee collecting IOD, said Leary. An employee must get permission to work while on IOD. Some activities may be acceptable for an employee to perform. "But, if the person is a police officer and is instructed by the doctor to not perform routine duties, then that person shouldn’t be working as a security guard at a nightclub. I need to review the doctor’s reports to determine what is acceptable and what is not for each individual case," Leary explained.
He’s also received calls from vendors reporting that they paid into a particular adjuster’s kitty and haven’t received anything in return yet. "Whether it’s a free burger or a trip to Hawaii, an adjuster/vendor quid pro quo constitutes fraud," Leary firmly stated.
All the information is then gathered and inserted into a referral, which is basically the size of a thick ream of paper.
Randomly Leary grabs a videotape out of a file cabinet. The view is of an outdoor basketball court shot from the inside of a surveillance vehicle. The footage is of a woman on temporary disability for a back injury. From watching the tape it’s obvious the woman is throwing down a mean game of hoops in high heels. She has both hands in the air, screening, throwing blocks and tossing hook shots. She’s playing a serious game.
Leary takes fraud seriously. On his office wall, there’s a sign, "Fraud, It’s not a game. It’s a crime." For those who treat it as a game, Leary, the fraud enforcer, is no one to go up against.
During the ’80s Leary cut his teeth working in an auto fraud unit for Industrial Indemnity Insurance. Then in the ’90s he went to work for Transamerica. Working as an adjuster, though not in the fraud department, he was instrumental in bringing down a string of 12 doctors along with their partners in crime.
"It’s like playing basketball," explained Leary. "You’ve got to have an all court plan. If the case is strong enough the DA can prosecute. If that doesn’t work, the city attorney can charge the person with a misdemeanor. The final option would be for the department to set up a Skelly hearing before a civil service commission board. If the evidence is convincing, the employee may be prosecuted or offered resignation in lieu of termination."
Fighting fraud is a year round sport. If it ever caught on like basketball or football, the parade route in LA would have to be moved over a couple of blocks.