La Barbeque Owners Indicted - Insurance Fraud

[torre 1286]

Thought a new thread was appropriate,  did not want to depreciate John's thread.    Another issue for the Mueller Family.

 

The owners of the popular East Austin restaurant La Barbecue are being indicted on fraud charges related to a 2016 insurance claim, according to a news release issued by the Texas Department of Insurance (TDI) earlier today, August 23.

The married couple, founder LeAnn Mueller and manager Allison Clem, have been summoned to appear in Travis County District Court on September 28 for allegedly carrying out a workers’ compensation fraud scheme, which resulted in a payout of more than $350,000 in medical and indemnity benefits.

According to TDI, the case began sometime in late July 2016 after an unnamed employee was hurt badly while working with kitchen equipment at La Barbecue when it was a food truck parked at 1906 East Cesar Chavez Street. Allegedly, that same day, Mueller and Clem were made aware of the injuries. During that time, the business didn’t have workers’ compensation coverage (and had been without it at the time since November 2014). However, the TDI report states that four days after the incident happened, Clem reached out to Paychex Insurance to acquire such coverage.

The TDI Fraud Unit states through the release that Clem did not share the employee’s incident or their injuries with the insurance agent. The department claims that she did, however, ask for the new policy to be backdated to July 1, 2016, which, according to the investigation, was three weeks prior to the employee sustaining their injuries. TDI reports that Mueller then signed an application for coverage, reporting that there had been no claims, allowing Travelers Casualty Insurance Company of America to approve the policy.

The release goes on to say that, after the policy was in place, the restaurant submitted a claim to Travelers for the injured employee, which was approved, resulting in the payout of more than $350,000 in benefits. According to the TDI release, the insurance company also assumed lifetime care for the injured employee. The exact injuries have not been made public at the time of publishing.

A case summary from the 147th District Court states the official offense as “fraudulent securing document execution,” which is considered a felony. The summary also lists the date for a pre-trial hearing as September 27.

If found guilty, it’s possible that Mueller and Clem would be ordered to pay restitution, plus up to double the amount Travelers already paid to the injured worker in benefits, as TDI details. In the state of Texas, employers are not required to have workers’ compensation coverage, but it is at their own risk, as lack of coverage leaves businesses open to potential injury lawsuits from employees.

Eater has reached out to Mueller, Clem, TDI, and the Travis County District Attorney’s Office for further comments.

Austin Restaurant La Barbecue Owners Indicted on Insurance Fraud Charges - Eater Austin

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[Celery Man 21010]

[Radical Larry 28664]

[conVINCEd 21473]

Backdating isn’t rare, but the alarms should have gone off in the claims department when there was a claim made during the backdated period.  

[Armybrat 40938]

Haven’t had their bbq since they catered their mom’s memorial reception in Taylor…

 

 

[Bill Brasky 1465]

I guess she can start an Onlyfans now 

*not referring to Armybrat's mom 

Edited August 23, 2022 by Bill Brasky

[CooterBrown 18034]

Backdating isn’t rare, but the alarms should have gone off in the claims department when there was a claim made during the backdated period.  

What reason would allow a policy to be backdated? It seems like that would set off insurance fraud alarms.

[Deej 76979]

So were their stolen briskets earlier this month also bullshit?

[dcbc 14542]

Statute of limitations for insurance fraud or similar (however it's charged) is five years.  I can't remember if there's something akin to the discovery rule on the criminal side of things, but we're six years out.  I'm sure there's some way they're saying it's tolled.

[Armybrat 40938]

One more picture to add to the above three…. John is standing in the background…

 

Edited August 23, 2022 by Armybrat

[Jerry Callo 8748]

7 minutes ago, dcbc said:

Statute of limitations for insurance fraud or similar (however it's charged) is five years.  I can't remember if there's something akin to the discovery rule on the criminal side of things, but we're six years out.  I'm sure there's some way they're saying it's tolled.

I suspect the insurance fraud continues so long as the employee is receiving benefits.  They also might have had subsequent paperwork that was also actionable.

[Chewbacca 7787]

I guess crime and bad decisions run in the family.  Who the fuck doesn't have Workers Comp?  

[dcbc 14542]

5 minutes ago, Jerry Callo said:

I suspect the insurance fraud continues so long as the employee is receiving benefits.  They also might have had subsequent paperwork that was also actionable.

Yeah, those financial crimes seem like they're self-propagating at a certain point.  They spend enough time out of Texas to allow for some tolling too.

Edited August 23, 2022 by dcbc

[ztejas 43552]

11 minutes ago, Chewbacca said:

I guess crime and bad decisions run in the family.  Who the fuck doesn't have Workers Comp?  

Well it was when they were running a trailer so I'm assuming they weren't exactly a well-oiled machine on the backend. Possibly had some 1099 employees. 

22 minutes ago, Deej said:

So were their stolen briskets earlier this month also bullshit?

Hah. My first thought as well. 

[mdleast 8314]

so...longer or shorter lines now?

[Chewbacca 7787]

18 minutes ago, ztejas said:

Well it was when they were running a trailer so I'm assuming they weren't exactly a well-oiled machine on the backend. Possibly had some 1099 employees. 

Even if that was the case, surely they knew they were committing fraud by signing a 'no known claims' letter when getting workers comp.

[ztejas 43552]

2 minutes ago, Chewbacca said:

Even if that was the case, surely they knew they were committing fraud by signing a 'no known claims' letter when getting workers comp.

I'm not defending what they did I'm answering the question "who doesn't have worker's comp?".

[Chewbacca 7787]

1 minute ago, ztejas said:

I'm not defending what they did I'm answering the question "who doesn't have worker's comp?".

People who are bad at business don't have workers comp.  

[Shaddie 1651]

Ok I have 0% experience in a commercial kitchen. 
 

How do you get the following. 
 

According to the TDI release, the insurance company also assumed lifetime care for the injured employee. The exact injuries have not been made public at the time of publishing.

[VABuckeye 2472]

Burns?

I'm facing my first workman’s comp claim from an employee.  It was denied today because “his story doesn’t add up” and it’s his 6th workman’s comp claim in the last seven years. 

[HornOnTheBayou 8953]

3 hours ago, CooterBrown said:

What reason would allow a policy to be backdated? It seems like that would set off insurance fraud alarms.

This is my question. If I tell State Farm that I want a new homeowner's policy starting last Tuesday at 3:00 and there was a hail storm at 4:00, I assume some red flags will be raised.

[CooterBrown 18034]

Ok I have 0% experience in a commercial kitchen. 
 
How do you get the following. 
 
According to the TDI release, the insurance company also assumed lifetime care for the injured employee. The exact injuries have not been made public at the time of publishing.

Could’ve slipped and injured his back and is deemed unable to work. It’s pretty easy to get SS disability approved if you don’t mind living in poverty. No idea if it’s just as easy for workers comp.

[Bill Brasky 1465]

5 hours ago, Deej said:

So were their stolen briskets earlier this month also bullshit?

maybe stolen briskets were discovered to be bullshit by insurance company, then they started digging further and found more 

[Brew 3049]

4 hours ago, Chewbacca said:

I guess crime and bad decisions run in the family.  Who the fuck doesn't have Workers Comp?  

You would be amazed at the number of operating entities that don’t have worker’s comp. Most states require it now but still exempt out operations with fewer than 5-10 employees. People just assume they will bankrupt the business out of any claims if anything happens and start over.

$350k in payouts over 6 years seems like a pretty high dollar amount for someone that was working in a food truck back then.

[Pato del Muerto 52633]

Ins co:  so let me get this straight. You want to pay me to cover you for a period of time already past in which you will sign to the fact that no incidents occurred?

business owner:  that’s correct. 
 

ins co:  yay free money!

[Gourmand 7774]

6 hours ago, Chewbacca said:

I guess crime and bad decisions run in the family.  Who the fuck doesn't have Workers Comp?  

You would be surprised how many don't since Texas doesn't require it. 

[closetojumping 62894]

4 hours ago, VABuckeye said:

Burns?

I'm facing my first workman’s comp claim from an employee.  It was denied today because “his story doesn’t add up” and it’s his 6th workman’s comp claim in the last seven years. 

The summer before I enrolled at Texas, I was a simple laborer for a contractor on the ship channel in Houston. Our crew worked at the Arco plant in Channelview and I was one of two non-lifers, getting nothing compared to everyone else, deservedly so. 

Anyway, one day I’m helping break down this concrete platform that had housed a benzene tank. There are ends of rebars coming out of the concrete and we have to use sledgehammers to bend them into the surface. One of the other guys doing this is using a rubber mallet. He hits a rebar oddly and the mallet ricochets violently back up and smashes his mouth. His teeth are shattered into shards and he’s bleeding profusely. He’s screaming and I’m an 18 year old dipshit trying to figure out how to find help. After a minute, he calms down and he’s just hocking up teeth and volumes of blood. I say “hey man, hang in there, I’m getting help. You’ll get patched up and they’ll have you back out here in no time.”

”No time,” the hillbilly looks at me and says through a shattered mouth, “shit, I’m getting workers comp for this, brother, I won’t be back out here for years!” and then he fist pumped. Never saw him again for the rest of the summer. 

That was the last I heard of him until I ran into him working in a food truck for LaBarbeque a few years back. 

[52-80 19271]

3 hours ago, closetojumping said:

The summer before I enrolled at Texas, I was a simple laborer for a contractor on the ship channel in Houston. Our crew worked at the Arco plant in Channelview and I was one of two non-lifers, getting nothing compared to everyone else, deservedly so. 

Anyway, one day I’m helping break down this concrete platform that had housed a benzene tank. There are ends of rebars coming out of the concrete and we have to use sledgehammers to bend them into the surface. One of the other guys doing this is using a rubber mallet. He hits a rebar oddly and the mallet ricochets violently back up and smashes his mouth. His teeth are shattered into shards and he’s bleeding profusely. He’s screaming and I’m an 18 year old dipshit trying to figure out how to find help. After a minute, he calms down and he’s just hocking up teeth and volumes of blood. I say “hey man, hang in there, I’m getting help. You’ll get patched up and they’ll have you back out here in no time.”

”No time,” the hillbilly looks at me and says through a shattered mouth, “shit, I’m getting workers comp for this, brother, I won’t be back out here for years!” and then he fist pumped. Never saw him again for the rest of the summer. 

That was the last I heard of him until I ran into him working in a food truck for LaBarbeque a few years back. 

[burntorangebongos 10752]

They bought themselves 6 years to have a business. Can they declare bankruptcy to get out of paying the Insurance co?

[dcbc 14542]

28 minutes ago, burntorangebongos said:

They bought themselves 6 years to have a business. Can they declare bankruptcy to get out of paying the Insurance co?

I'm almost positive bankruptcy doesn't shield a debtor from criminal fines and civil forfeiture stemming from a criminal matter?

[TwiceHorn 31597]

19 minutes ago, dcbc said:

I'm almost positive bankruptcy doesn't shield a debtor from criminal fines and civil forfeiture stemming from a criminal matter?

Correct.  And debts arising from fraud, even "civil" fraud.

[YGIFS 19452]

Between Mueller's and La Barbecue, all I can think of is that scene in Airplane II when the investigator comes into the control room and says a passenger is trying to blow the thing up for an insurance fraud scam.  

Lloyd Bridge (being handed the file): "Hey, wait a minute!  This is an auto insurance policy!" 

Investigator: "That's why we're worried." 

 

some of y'all that know these owner folks, you can give them some free legal advice from me.  If they get backed into a corner by the other side, tell 'em to use the Sol Rosenberg defense.  

"Didn't you have insurance?"

"Yeah, but it was through a friend..."

[dcbc 14542]

3 hours ago, TwiceHorn said:

Correct.  And debts arising from fraud, even "civil" fraud.

I think in cases of civil fraud judgments, discharge of that debt can be put at issue by the creditor, but the BR judge still has the option to rule against the creditor and discharge the debt.  But it's iffy, for sure and best practice should be to avoid committing fraud (allegedly).

Edited August 24, 2022 by dcbc

[Deej 76979]

It's a shame John isn't still around to tweet at her. 

Edited August 24, 2022 by Deej

[Atxracer 797]

2 hours ago, YGIFS said:

"Didn't you have insurance?"

"Yeah, but it was through a friend..."

This is the truth.  I have a law license and insurance license. It took 3 years and a shitty test for the law license, it took 3 days and a test a high school dropout could pass for the insurance license.  I could do WAY more damage to others with the insurance license than I could the law license.    

[dcbc 14542]

11 minutes ago, Atxracer said:

This is the truth.  I have a law license and insurance license. It took 3 years and a shitty test for the law license, it took 3 days and a test a high school dropout could pass for the insurance license.  I could do WAY more damage to others with the insurance license than I could the law license.    

 

[conVINCEd 21473]

23 minutes ago, Atxracer said:

This is the truth.  I have a law license and insurance license. It took 3 years and a shitty test for the law license, it took 3 days and a test a high school dropout could pass for the insurance license.  I could do WAY more damage to others with the insurance license than I could the law license.    

This was a long time ago.  I got my life and health license after reviewing the material about the state specific stuff  for 15 minutes in the parking lot of the testing center.  No class.  I had a lot of exposure to the basic concepts, and my boss at the time offered to pay for the class, but I told her that it would be a waste of my time and her money.  Got an 92 on the test.

[conVINCEd 21473]

38 minutes ago, Atxracer said:

This is the truth.  I have a law license and insurance license. It took 3 years and a shitty test for the law license, it took 3 days and a test a high school dropout could pass for the insurance license.  I could do WAY more damage to others with the insurance license than I could the law license.    

Also, you could do more harm to others with your law license if you decided to run for District Attorney in a rural county.

[LW Goatman 1125]

17 hours ago, dcbc said:

Statute of limitations for insurance fraud or similar (however it's charged) is five years.  I can't remember if there's something akin to the discovery rule on the criminal side of things, but we're six years out.  I'm sure there's some way they're saying it's tolled.

SOL for insurance fraud under the TX code of criminal procedure is 5 years. They were charged with fraudulent securing of document execution which has a 7 year limitations period (this of course from the time of the offense). It's also important to note that this is a first degree felony based on the monetary value. 

[dcbc 14542]

55 minutes ago, conVINCEd said:

Also, you could do more harm to others with your law license if you decided to run for District Attorney in a rural county.

Indeed.

 

[dcbc 14542]

42 minutes ago, LW Goatman said:

SOL for insurance fraud under the TX code of criminal procedure is 5 years. They were charged with fraudulent securing of document execution which has a 7 year limitations period (this of course from the time of the offense). It's also important to note that this is a first degree felony based on the monetary value. 

There it is.  Missed it last night. 

[TwiceHorn 31597]

2 hours ago, dcbc said:

I think in cases of civil fraud judgments, discharge of that debt can be put at issue by the creditor, but the BR judge still has the option to rule against the creditor and discharge the debt.  But it's iffy, for sure and best practice should be to avoid committing fraud (allegedly).

You have to file a proof of claim, yes, and the claim can be rejected, depending on the findings in the judgment.

[woohorn 1131]

Hard to believe it took the insurance company 5 years to crack that case tho.

[DoobieWah 1467]

2 hours ago, Atxracer said:

I could do WAY more damage to others with the insurance license than I could the law license.    

Don’t underestimate yourself counselor. 

[DFWTexEx 278]

19 hours ago, CooterBrown said:

What reason would allow a policy to be backdated? It seems like that would set off insurance fraud alarms.

Backdating policies is not that uncommon.   It corrects errors made in the binding process.   BUT, it all keys on a No Known Loss Letter.  In this letter, the insured certifies that it is not aware of losses or incidents that could lead to a loss in the gap period.   It seems that is where these folks lied (allegedly).

[deadshank 24653]

csb time:

There are all sorts of idiots out there.  I had another roofing contractor call me after he burned down a house when his asphalt kettle overheated, blew up and caught the house on fire.  He had no general liability insurance coverage and asked if I could claim the loss on my general liability insurance policy and he would write us a check to cover the deductible.

Uh, no.

[LW Goatman 1125]

The entity will want to be made whole. The criminal matter, if guilt is determined, has two punishment options which are pen time or probation. A condition of probation can, and would in this situation, have payment of restitution in the full amount according to a schedule falling within the term of probation. 

If restitution is a condition of probation, and a payment is missed (or any other condition of probation violated), a motion to revoke can be filed and the individual can be sentenced to pen time. If they are sent to the pen under any circumstances, the restitution is no longer on the table in the criminal matter as there is no probation. 

[Brisketexan 105463]

In a much earlier stage in my career, I pursued civil workers comp insurance premium fraud cases (e.g., a shell company with 3 office employees would be set up -- all those jobs have low risk ratings, and the number of employees was low, which meant cheap premium).  Then the "subsidiary" of that shell -- which was a building contractor with 50 employees who climbed scaffolding and worked with saws and shit -- would use that certificate of insurance to represent that it had comp coverage so it could get jobs.  There actually is exposure to the insurance co to cover those other 50 people, so they would sue for the back premium.

The folks we sued always thought they were being super-clever, and had spotted a fool-proof loophole.

They weren't, and they hadn't.

Trying to pull one over on a company with assets in the hundreds of millions is usually a bad idea.

[Johnny Sack 8397]

20 hours ago, ztejas said:

I'm not defending what they did I'm answering the question "who doesn't have worker's comp?".

Plenty of large companies do not.  They self insure.  And usually will have an injury plan that allows them to control costs.

[Sbbruin 21900]

4 minutes ago, Johnny Sack said:

Plenty of large companies do not.  They self insure.  And usually will have an injury plan that allows them to control costs.

Yeah, but a business like this is not like those.