In Ohio, all employers with at least one employee are required to have workers’ compensation insurance coverage. The Employer Fraud Team (EFT) of the Ohio Bureau of Workers’ Compensation became aware that the Old Crow Bar at 1217 Jackson Lane in Middletown were operating without workers compensation coverage for their workers. The EFT then sent agents to interview Lynn Howard, age 69, of Franklin, together with Chris Kraft, age 47, and John House, 53, of Middletown who together owned the Old Crow Bar. Agents explained to the owners that they were not compliant with the law and gave them instructions on how to open a policy with the Bureau of Workers’ Compensation.
Workers’ compensation coverage is a significant overhead for employers. In Ohio, the median cost of a policy is $1.40 per $100 of payroll. Throughout the country, there have been reports of business owners being convicted for avoiding paying workers’ compensation insurance. Businesses have been found to misclassify workers, underreport payroll, or—as here—attempt to avoid paying workers’ compensation insurance at all.
Although the cost of the insurance premiums may be high, without coverage, employees are on the hook for the entire cost of any claims made.
The owners of the Old Crow Bar did not comply with the EFT agents’ instructions and continued to run the bar in violation of the law. In March 2018, the three owners were each charged at the Middletown Municipal Court with the first-degree misdemeanor charge of Workers’ Compensation Fraud. The defendants faced jail time if convicted.
Once the charges had been filed, the defendants applied for and obtained workers compensation insurance coverage for their employees. They paid all the penalties and premiums owed. In return for coming into compliance, the prosecution offered to reduce the charge to the fourth-degree misdemeanor of “disorderly conduct.”
In December, at separate hearings, the three defendants pleaded guilty to and were convicted of disorderly conduct. Howard and Kraft were ordered to each pay a $100 fine and $90 in court costs. They were also sentenced to a day in jail, but this was suspended. House received a $200 fine and $90 in court costs and was additionally received a suspended jail term of 10 days.
In February 2018, John Fugate, age 46, was attacked at the Old Crow Bar and later died from his injuries. A musician who booked artists to appear at the bar, Fugate was on the stage when he was allegedly hit. Falling off the stage, he hit his head on the floor. He was taken to hospital in Dayton but died later that morning.
Tony Gottschlich of the Ohio Bureau of Workers’ Compensation said that, while the EFT’s case against the owners of the bar had nothing to do with Fugate’s death, “if the volunteer killed there had been an employee of the bar, the owners would have been responsible for the claim that followed. That’s why workers’ comp insurance is so important.”
Florida Workers’ Compensation Fraud Defense Attorney
If you are involved in a worker’s compensation fraud investigation, then you should hire a lawyer. Contact us to set up a free initial consultation and work with one of Florida’s most experienced workers’ compensation fraud defense attorneys.