Reading Room

Injured Workers' RICO Claim to Proceed Against Employer and Insurance Company
/ Categories: Workers' Compensation

Injured Workers' RICO Claim to Proceed Against Employer and Insurance Company

Workers' Compensation

In a landmark decision of immense national significance, the US Sixth Circuit Court of Appeals ruled that a RICO claim brought by injured workers against their employer, insurance carrier and employer medical expert could proceed. Several injured workers brought the Federal Racketeer Influenced and Corrupt Organizations Act (RICO) against their employer, Crawford & Company, and [cut-off treatment doctor] Dr. Saul Margules.

The Federal Racketeer Influenced and Corrupt Organizations Act, or RICO, is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization. The legislation was enacted in 1970 to combat organized crime, such as the Mafia primarily, in the United States. However, the law has been applied to various criminal activities, including fraud, money laundering, and other white-collar crimes over the years.

One area where RICO has been used in relation to workers' compensation is in cases of employer fraud. Under workers' compensation laws, employees are entitled to receive benefits if they are injured or develop an occupational disease. Employers must carry insurance to cover these benefits and are not allowed to discriminate against employees who file workers' compensation claims. However, some employers may try to avoid paying benefits by denying that an injury or illness is work-related, or by pressuring employees not to file claims.

In these cases, RICO can be used to hold employers accountable for their fraudulent actions. RICO allows for both criminal and civil penalties, including fines and imprisonment for individuals and the dissolution of corporations that violate the law. In civil cases, employees or other individuals affected by the fraud may be able to recover damages.

Using RICO in cases of workers' compensation fraud can be an effective way to hold employers accountable and ensure that employees receive the benefits they are entitled to. It is important for employees to be aware of their rights under workers' compensation laws and to speak up if they believe their employer is committing fraud. Using tools like RICO, employees can protect themselves and ensure justice is served in cases of employer wrongdoing.

The allegations included that ".....Cassens and Crawford deliberately selected and paid unqualified doctors, including Margules, to give fraudulent medical opinions supporting the denial of worker’s compensation benefits and that defendants ignored other medical evidence in denying them benefits. The plaintiffs claimed that the defendants made fraudulent communications amongst themselves and to the plaintiffs by mail and wire in violation of 18 U.S.C. §§ 1341, 1343, which serve as the predicate acts for their RICO claims."

The decision authored by Judge Karen Nelson Moore held "...that plaintiffs’ RICO claims [may go forward] because the WDCA [Michigan Workers' Compensation Disability Act] does not preempt their RICO claims and because plaintiffs have sufficiently pleaded a pattern of racketeering activity given that reliance is not an element of a civil RICO fraud claim."

The Court concluded, "...Our conclusion that worker’s[sp] compensation benefits are not insurance and our conclusion that the WDCA was not "enacted . . . for the purpose of regulating the business of insurance," each independently forecloses the defendants’ argument that the WDCA reverse preempts RICO under the McCarran-Ferguson Act.

Of additional significance is that sitting by designation on the panel with Judge Moore and Judge Gibbons, was The Honorable Harold A. Ackerman, US District Court Judge for the District of NJ. Judge Ackerman has long, and knowledge history of RICO actions and was a former NJ Workers' Compensation Judge.

Brown, et al. v. Casses Transport Co., et al., 6th Cir. 2008, Decided October 23, 2008. Petition for Writ of Certiorari denied by the US Supreme Court. Cassens Transport Co. v. Brown, 558 US 1085 - Supreme Court 2009


The author, Jon L. Gelman, practices law in Wayne, NJ. He is the author of NJ Workers’ Compensation Law (Thomson-Reuters) and co-author of the national treatise Modern Workers’ Compensation Law (Thomson-Reuters). For over five decades, the Law Offices of Jon L Gelman  1.973.696.7900 have represented injured workers and their families who have suffered occupational accidents and illnesses.

Recommended Citation: Gelman, Jon L., Injured Workers' RICO Claim to Proceed Against Employer and Insurance Company, (2009),

© 2009-2023 Jon L Gelman. All rights reserved.

Attorney Advertising

Prior results do not guarantee a similar outcome.


Download Adobe Reader

Previous Article Is It Time For A Delay Of Game Penalty And Workers' Compensation?
Next Article Employee Exposed to Perfume at Work Allowed Workers' Compensation Benefits

Documents to download