Insurance Code Section 1871.5 states:
“Any person convicted of worker’s compensation fraud pursuant to Section 1871.4 or Section 550 of the Penal Code shall be ineligible to receive or retain may compensation where that compensation was owed or received as a result of a violation of Section 1871.4 or Section 550 of the Penal Code for which the recipient of the compensation was convicted.”
Tensfeldt v WCAB (1998) 66 Cal. App. 4th 116, 77 Cal. Rptr. 2d 691, 63 CCC 973 sets forth a three pronged test for determining whether a worker is entitled to receive or retain worker’s compensation benefits after a worker’s compensation insurance fraud conviction. An individual may retain or receive compensation benefits after a fraud conviction if there is (1) an actual, otherwise compensable, industrial injury ; (2) substantial medical evidence supporting an award of compensation not stemming from the fraudulent misrepresentation for which the claimant was convicted; (3) that claimant’s credibility is not so destroyed as to make claimant unbelievable concerning any disputed issue in the underlying compensation case. P.125-126.
The court held that an individual is barred from retaining or receiving any compensation which stems directly from the fraudulent misrepresentation.