H 3523 General Bill, By Sharpe, M.O. Alexander, Alexander, Allison, Bailey, 
H. Brown, Carnell, Cato, C.D. Chamblee, Davenport, L.L. Elliott, R.C. Fulmer, 
Gamble, S.E. Gonzales, J.L. Harris, Harrison, M.F. Jaskwhich, Keegan, Kennedy, 
Koon, Lanford, Law, Littlejohn, J.G. McAbee, Quinn, Richardson, Riser, Robinson, 
J.S. Shissias, Simrill, R. Smith, C.H. Stone, Stuart, Townsend, Vaughn, 
C.Y. Waites, Walker, C.C. Wells, Wilder, J.B. Wilder, Wilkins, Witherspoon, 
S.S. Wofford, D.A. Wright, Young-Brickell and R.M. Young
 A Bill to amend the Code of Laws of South Carolina, 1976, by adding Section
 42-9-440 so as to make it a felony for a person by fraudulent conduct to
 enable an employer, carrier, employee, dependent, or service provider to
 obtain an undeserved economic advantage or benefit under the Workers'
 Compensation law and provide a penalty, to provide, among other things, that
 the Workers' Compensation Commission shall promptly refer all cases of
 suspected fraud to the Office of the Attorney General, and to add the crime
 provided in Section 42-9-440(A) to the list of crimes classified as felonies
 in Section 16-1-10.

   02/18/93  House  Introduced and read first time HJ-5
   02/18/93  House  Referred to Committee on Judiciary HJ-6

A BILL

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 42-9-440 SO AS TO MAKE IT A FELONY FOR A PERSON BY FRAUDULENT CONDUCT TO ENABLE AN EMPLOYER, CARRIER, EMPLOYEE, DEPENDENT, OR SERVICE PROVIDER TO OBTAIN AN UNDESERVED ECONOMIC ADVANTAGE OR BENEFIT UNDER THE WORKERS' COMPENSATION LAW AND PROVIDE A PENALTY, TO PROVIDE, AMONG OTHER THINGS, THAT THE WORKERS' COMPENSATION COMMISSION SHALL PROMPTLY REFER ALL CASES OF SUSPECTED FRAUD TO THE OFFICE OF THE ATTORNEY GENERAL, AND TO ADD THE CRIME PROVIDED IN SECTION 42-9-440(A) TO THE LIST OF CRIMES CLASSIFIED AS FELONIES IN SECTION 16-1-10.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. The 1976 Code is amended by adding:

"Section 42-9-440. (A) Any person who by fraudulent conduct enables an employer, carrier, employee, dependent, or service provider to obtain an undeserved economic advantage or benefit under the Workers' Compensation Law is guilty of a felony and, upon conviction, must be punished by a fine not to exceed fifty thousand dollars or by imprisonment not to exceed five years, or by both fine and imprisonment. Where appropriate, a party obtaining the undeserved economic advantage or benefit may be ordered to pay full restitution of premium payments avoided by fraud, benefits fraudulently withheld, or benefits obtained through fraud.

(B) The commission shall promptly refer all cases of suspected fraud to the Office of the South Carolina Attorney General.

(C) The Attorney General, upon receipt of allegations of fraud committed by any person in connection with a workers' compensation proceeding, whether the report is received from the commission or from any party to such a proceeding, is empowered to do all of the following:

(1) perform investigations;

(2) prosecute persons determined to be in violation of subsection (A) in courts of appropriate jurisdiction; and

(3) collect fines and restitution ordered by such courts.

(D) The Workers' Compensation Fraud Unit must be funded by an appropriation of not less than two hundred thousand dollars annually to be obtained from the workers' compensation tax collected from workers' compensation carriers and workers' compensation self-insurers under Sections 38-7-50 and 42-5-190.

(E) Where considered appropriate, the Attorney General may use the Setoff Debt Collection Act to collect fines and restitution ordered as the result of actions brought pursuant to this section. All recoveries in claims previously reimbursed by the Second Injury Fund must be prorated in accordance with the percentage interests of the carrier or self-insurer and the Second Injury Fund.

(F) Personnel of the Workers' Compensation Commission and Attorney General are not liable in a civil action for any action taken in good faith under this section including the identification and referral of a person for investigation and prosecution for a possible criminal offense. Employers, insurers, claimants, and respective agents or representatives of such persons who in good faith report information under this section to the Workers' Compensation Commission or the Attorney General's office are not liable in any civil action for reporting or otherwise disclosing such information.

(G) All records of past injuries or claims of injuries pursued by an employee or claimant before the Workers' Compensation Commission must be made available by the Workers' Compensation Commission upon the request of any party to a pending workers' compensation claim involving the same employee or claimant. The costs of receiving such information shall be the same as provided in Section 42-15-95."

SECTION 2. The crime provided for in Section 42-9-440(A) of the 1976 Code, as contained in Section 1 of this act, is added to the list of crimes classified as felonies in Section 16-1-10.

SECTION 3. This act takes effect upon approval by the Governor.