By Jessica Bergeman
Special Prosecutor, Embedded Fraud Unit in the District Attorney’s Office in Travis County
Workers’ compensation fraud prosecution is not universally viewed as the sexiest area of practice, so I was both honored and surprised to be asked to contribute this article to The Texas Prosecutor about a recent high-profile case disposition. I appreciate the opportunity to discuss the importance and complexity of my work as Special Prosecutor for the Texas Department of Insurance’s (TDI) Division of Workers’ Compensation (DWC). I’d also like to shine a light on some common misconceptions about it.
About the case
In May 2024, Frances A. Hall pled no contest to one count of second-degree Securing Execution of Document by Deception in the 147th District Court of Travis County. Ms. Hall was co-owner (through marriage) and a workers’ compensation insurance policy contact for Bill Hall Jr. Trucking during Texas Mutual Insurance Company (TMIC) coverage years of 2009–2016. Part of Ms. Hall’s policy contact responsibilities was providing accurate payroll reports to the insurance carrier to calculate premiums based on the carrier’s exposure.
Ms. Hall became the sole owner of the Bill Hall Jr. family of trucking companies upon the death of Bill Hall Jr., which is the basis for how my workers’ compensation insurance fraud prosecution gained media attention. Frances Hall was convicted of causing the death of her husband while attempting to assault his mistress in October 2013, and the story became highly sensationalized in national media coverage when she received a sentence of two years in prison, perhaps based on the jury’s acceptance of the defense’s mitigation theory of sudden passion. Before her trial and incarceration, Ms. Hall had exclusive responsibility for Bill Hall Jr. Trucking group for purposes of insurance policy coverage and auditing responsibilities from October 2014 through February 2016, when TMIC canceled the coverage for the suspected fraud. During her control of the companies, the information she reported to TMIC increasingly aligned with TMIC’s actual exposure. However, over the entire seven years of coverage, the trucking companies and their owners avoided paying ap- proximately $9 million in premium fees by underreporting their workforce payroll. While that seems like an astronomical amount, it’s correlated to the number of employees, the total payroll, and the risk associated with the kind of business being conducted by the policyholder and the employees.
About workers’ compensation
Workers’ compensation—affectionately shortened to “comp”—is a boutique area of practice. It is different from regular insurance practice because it is limited to a single type of insurance coverage regulated by DWC pursuant to the Texas Labor Code and adopted rules. Workers’ comp fraud cases often overlap with other kinds of crimes, such as wage theft or worker misclassification. I’m always happy to be a resource for others if they identify a comp issue in their prosecutions, and the DWC Fraud Unit can also be consulted for their expertise.
As Texas continues to increase in population and construction projects, labor-based crimes are prevalent across the state. My hope is this article will assist other prosecutors in spotting comp issues in their own caseload and know that help is available to them.
Workers’ compensation is not mandatory in the State of Texas, but participating in the system provides protections for both workers and employers in the event of an on-the-job injury. The injured worker gets no-cost access to health care to treat the injury so s/he can return to work, and the employer is protected from civil liability. The premiums paid by participating employers provide the basis for funding the comp system through a maintenance tax on the premiums. Employers who do not wish to participate in the system can declare themselves “nonsubscribers” with the Division of Workers’ Compensation, but they leave themselves vulnerable to the entire range of civil liability if an employee is injured at work.
Claimant cases are what most people probably think of when they hear “workers’ comp fraud,” but they represent only a small fraction of the actual fraud being committed in the comp system, according to national experts. The Coalition Against Insurance Fraud launched a task force in 2021 to review fraud in workers’ compensation systems across the country. The report estimates that of the $34 billion in comp fraud discovered, $9 billion is in bogus claims filed by employees, while $25 billion is premium fraud.[1]
I think it’s essential to note that workers’ comp fraud is not a victimless crime. The Texas workers’ compensation system is funded by a maintenance tax on insurance carriers, not through general revenue. If comp carriers are defrauded, it has the potential to raise premium costs for businesses in Texas, as well as undermine the ongoing viability of this critical protection for Texas workers.
As Special Prosecutor for DWC, I work in the Travis County DA’s Office with the authority of an Assistant District Attorney pursuant to House Bill 2053, which took effect in 2017. It authorized DWC to embed a prosecution unit in Travis County to handle cases referred by the DWC Fraud Unit subject to a memorandum of understanding (MOU) between DWC and the Travis County DA’s Office. My unit is unique, as we are DWC Fraud’s only prosecution team, while TDI has prosecutors embedded in several DA offices across the state, including Travis, Harris, Dallas, and Bexar Counties. Travis County has jurisdiction over all comp cases because all comp carriers, who are usually the victims in our cases, are mandated by the legislature to have a registered agent in Travis County. Therefore, all my prosecutions are conducted in Travis County.
I have a small team of one investigator and one legal assistant, and we handle only cases referred by the DWC Fraud Unit. DWC is mandated to investigate allegations of workers’ compensation fraud across the State of Texas, which is a big ask for a team of five investigators, three data analysts, and a director. It is advantageous that many insurance carriers have Special Investigation Divisions that compile much of the evidence needed for DWC’s Fraud Unit so that they can then review, investigate, and refer cases appropriate for criminal prosecution.
My cases are extremely document-heavy, with thousands of pages of insurance policies, hospital records, bank account information, certified public accounting (CPA) records, Secretary of State and Texas Workforce Commission records, email communications, cell phone records, etc. These documents help us form the basis of the crime itself and provide an excellent starting point for witness interviews so we can understand the behind-the-scenes activities of companies. From there, we can ascertain who the decision makers are on insurance issues, their motives, and who has provable culpability in these complex, often multi-year fraud schemes.
For example, in the Hall case, we conducted interviews of multiple witnesses with insight into the daily activities of the Bill Hall Jr. Trucking family of companies to understand how much authority Frances Hall had as a decision maker or whether it was Bill Hall Jr. who exercised control over the businesses. While I can’t disclose the specific details obtained in the course of our investigation, the information we received directly informed my decisions on how to approach the prosecution and was instrumental in negotiating a fair disposition of the case.
The referrals we receive from DWC Fraud are varied. Many are premium fraud cases—like the Hall case—but we also prosecute billing fraud in the comp system by doctors and lawyers, as well as claimant fraud cases. Claimant cases usually fall into a category called “double dipping,” where an employee claims to be unable to work, thereby receiving benefits at the maximum level authorized by the Labor Code, but then works at another job without disclosing that income to the insurance carrier. It’s a common misconception that injured employees are prohibited from earning wages from a different job if they are receiving comp benefits, but that is not true. What is true is that the employee is responsible for advising the insurance carrier of that income so that their benefits can be adjusted to conform to the requirements instituted by the Legislature.[2]
About me
I’ve been DWC’s Special Prosecutor since 2019, but this is not my first rodeo, if you will. I spent almost 10 years in the Cook County (IL) State’s Attorney’s Office prosecuting crime as an Assistant State’s Attorney. I like to say that I did my hard time in street crime in Chicagoland, where I prosecuted public safety violations, property and violent crimes from misdemeanors to felonies, including DUIs, domestic violence, child sex crimes, assaults and batteries, and weapons violations. I gave up my career in prosecution—or so I thought—to move to Texas. I worked as the Director of the Client Attorney Assistance Program at the State Bar for several years, where I was able to effectively restore communication in thousands of lawyer-client relationships, avoiding the necessity of clients filing a grievance against their attorneys to get their attention.
But being a prosecutor is part of my identity. The trick for me became finding a role in prosecution that didn’t have the damaging psychological impact of violent crime prosecution. My current role fits the bill perfectly—I can use the trial skills I honed in Chicago, as well as my natural love of mysteries and problem-solving, to deep-dive into my caseload and see justice done for my victims in the protection of an important safety net for Texas workers.
Conclusion
By virtue of the deception involved, comp fraud can take a long time to discover, investigate, and prosecute. Circumstances that may have existed during the timeframe of the criminal activity—or “crimeline,” as I call it—may have changed by the time a case is referred and prepped for indictment, trial, and disposition. The Hall case is a great example of this. While the crime was being committed, there were multiple companies and individuals involved who could have been adjudicated as culpable, but by the time we were able to indict the case and dispose of it, only one viable defendant remained. All the businesses were bankrupt and defunct, the primary target was deceased, and the secondary target was only recently released from prison. These truths dramatically impacted the amount of restitution possible to recover for the victim insurance carrier. Ultimately, Ms. Hall was sentenced in July on her no-contest plea and paid $50,000 upfront to Texas Mutual in restitution but will pay the company $100,000 over the next 10 years of her probationary period for her part in the multi-year scheme.
[1] See Workers’ Compensation Fraud Report 2022, Coalition Against Insurance Fraud https:// insurancefraud.org/wp-content/uploads/2023-Workers-Comp-report.pdf.
[2] See Tex. Labor Code §408.041 et seq; 28 Tex. Admin. Code 129.4.