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23 years ago, Laureen Pedroza was a young detective in the Los Angeles office for the California Department of Insurance. She was on a medical mill fraud case that was progressing through a grand jury.

As she told the audience in the conference room on Thursday, May 14^th, at The Big 2015 Fraud Fighting Conference at the Pala Resort in Riverside County, half way through those grand jury proceedings, Deputy District Attorney Ed Miller came onto the case. She remembered that he was pushy and demanding.

She remembered thinking, “We’re going to have to find a way to make this happen.” Then she reflected, “He survived. And that’s how we met all those years ago.”

So, at the big fraud conference, she partnered once again with Ed Miller over two decades later from that first meeting, to address an audience of prosecutors, investigators, vendors, and claims professionals. “First I would like to say thank you to Laura Clifford for inviting me to be here,” she expressed. “When she told me I was going to be on this panel with this great group, I was excited, and I was even more excited when Jennifer said she invited Ed Miller to be here.”

For Laureen, as expressed in her talk, it’s about working together. Over her 23 years, she sees over this time frame that it has progressively become more and more about working together.

“We work very closely with the prosecutors. And (feel) the value of dealing with the insurance industry. You’re the front line. You see what’s happening. You see the trends. And with your help to help us push this forward, it makes it a whole lot easier.”

Laureen sees through her experience how workers’ compensation investigations and prosecutions have changed significantly over the last 23 years. She sees the victims as still the same, but how the partners work together has changed, through a combination of technology and communication development.

“Back in 1991… we didn’t understand the language of insurance fraud. If you didn’t ask the right questions that could simply dump the case.”

So, Laureen sees it was from getting closer to the insurance people and evolving a common language that pushed the fight against insurance fraud forward; along with, very significantly, evolving technology that inextricably intertwined with the language-relationship evolution.

Laureen Pedroza, right, spoke about the importance of partnering and about what's changed and what's remained the same in workers' compensation claims fraud in the past 20 years. photo by Lonce LaMon, all rights reserved

Laureen reflects back and remembers Harvey Levin. “Back in 1991… he was doing all these investigative exposes. I believe it was out of CBS in Los Angeles. He would go to local EDD offices and follow these people who had been laid off. Once companies were laying off people, (the laid-off employees) were filing for unemployment and Harvey Levin was following these cappers that were following these people that were getting laid off.”

The cappers were recruiting the laid-off employees to file workers’ compensation claims. “It was an easy way to make money,” Laureen remembered. “One of the first pieces that came out of these investigative exposes was about Dr. Caplan. Remember him? Way back in the day. This was the case that took us about 3 years, from start to finish. We went and served a search warrant, saw boxes and boxes of file folders, and then we also served search warrants on banks; and from banks we received boxes and boxes of information.”

The investigators and the prosecutors looked in the backs of the folders, and there it was written who had referred the person, and how much they were paid for it. “And now we were at the doctor’s office… trying to figure out if, how much they paid for these referrals. We would find the pay-out sheets. Everybody remember those?”

Laureen also recalled they also had an assistant who did nothing but data entry of checks. “So, now we fast forward to twenty years later, and I ran into Ed about a year and a half ago and realized he was the assistant head deputy of the LADA’s heath care workers’ comp fraud unit. I thought wow, this is fabulous. Ed’s still here and so am I.”

Ed Miller (clipped off on the left) smiles and listens to Laureen Pedroza as she speaks on May 14th 2015 at The Big 2015 Fraud Fighting Conference at the Pala Resort in Riverside County. photo by Lonce LaMon, all rights reserved

Today Ed and Laureen in partnership with the insurance claims industry have the technology to pull records directly from bank accounts. “And scan them into a program, and in two hours have all that information in a data table,” Laureen said. “Investigators can start working quickly. It doesn’t take us three years to investigate a basic premium fraud case.”

The Department of Insurance does the data search on the bank records and the payroll records, and finishes the searches and interviews within the first 90 days. “We’re now partners with EDD and Franchise Tax Board; they can do their magic and that information comes back to the prosecutor.”

Now the Department of Insurance doesn’t necessarily have to do surveillance any more. Laureen said, “Now it’s all about Facebook. Twitter."

Laura Clifford, the Director of the Employers' Fraud Task Force and Hostess of the event, pulls another card out of the bowl for another raffle prize winner. photo copyright Lonce LaMon, all rights reserved

But premium fraud is still a very big issue and that has not changed, according to Laureen. “There are businesses out there doing the right thing. And they can’t compete with those who aren’t doing the proper payroll and aren’t retaining the proper insurance.

“So, a lot has changed in work comp in the landscape. But the victims are still the same. And we’re still here to manage workers’ comp fraud."

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