Fraud in the Garage – WA Couple Sentenced to Repay Nearly $140,000 in Workers' Comp Scam

Vancouver, WA (WorkersCompensation,.com) - A married couple who worked at their son’s auto repair shop while collecting workers’ comp payments has been sentenced to repay the state nearly $140,000.

Jeffrey Bart Pierson, 62, and his wife, Karen S. Pierson, 63, both of Vancouver, each pleaded guilty in Thurston County Superior Court this week to felony, second-degree theft.

Judge James Dixon has ordered Jeffrey Pierson to repay the Washington State Department of Labor & Industries (L&I) $89,976. The total represents the amount of benefits he stole over about two years starting in August 2018.

He sentenced Karen Pierson to repay L&I $49,723, the amount she stole over 15 months starting in July 2019.

The judge ordered each defendant to serve 240 hours of electronic home detention.

“We’re pleased we can return this stolen money to the state workers’ compensation fund,” said Celeste Monahan, acting assistant director of L&I’s Fraud Prevention and Labor Standards division. “That’s where it belongs: Helping injured workers heal and return to work, not fattening the wallets of impostors.”

The Washington State Attorney General’s Office prosecuted the case based on an L&I investigation.

Declaring they’re too injured to work

The defendants claimed they were injured at their son’s shop, My Dad's Automotive & Exhaust, in Hazel Dell. Jeffrey Pierson, a mechanic, hurt his back when moving equipment in June 2018. A year later, Karen Pierson, the shop’s office manager, injured her neck, knee, and arm climbing stairs.

Their medical providers determined they couldn't work because of the workplace injuries, making them eligible to receive payments to replace part of their wages.

In addition, the pair repeatedly signed L&I forms verifying they weren’t working because of their injuries, another key requirement to receive the payments.

Lifting garbage can over his head

After receiving an anonymous tip, however, L&I investigators filmed nearly 90 videos of Jeffrey Pierson. They showed him cutting exhaust pipes, lifting a garbage can over his head, working under vehicles on an overhead lift, and performing other physical tasks in 2020, according to charging papers.

A separate L&I staff referral prompted the investigation into Karen Pierson. As office manager, she was in contact with L&I collections staff about the company’s past-due workers’ compensation insurance premiums.

The L&I revenue agent assigned to collect the shop’s premiums discovered that while he was corresponding with her about the business, she was claiming to another part of L&I she was too injured to work.

Tipped off by the revenue agent, investigators recorded nearly 60 videos and photos of Karen Pierson working at the shop in 2020.

In addition to recording the couple, two L&I investigators visited the shop in October 2020. They saw Jeffrey Pierson working in a service bay and Karen Pierson working in the office.

Medical experts determine defendants could have returned to work earlier

An L&I investigator presented the surveillance videos to panels of medical experts called independent medical examiners, according to charging papers.

The examiners determined that Jeffrey Pierson should have been able to return to work in August 2018, about five weeks after his injury, and that Karen Pierson’s injury never impaired her ability to work.

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