Texas Man Pleads Guilty to Workers’ Comp Fraud; Ordered to Repay $806K

Texas Mutual Insurance Co. reported that Howard Douglas Whiddon of Dripping Springs pleaded guilty to workers’ compensation fraud-related charges in a Travis County district court. The court sentenced Whiddon to 10 years’ deferred adjudication and 160 hours of community service, and ordered him to pay $806,020 in restitution to Texas Mutual.

Whiddon and his Austin-based company, Whiddon Masonry & Stucco Inc., were indicted in March 2011. The indictment alleged that between Nov. 9, 2004, and Jan. 30, 2008, Whiddon intentionally misrepresented the operations and payroll of a related company, Veranda Masonry Inc.

Because workers’ compensation insurance premium is based, in part, on payroll, this type of scheme results in an employer being charged a lower premium than it actually owes. By hiding payroll, an employer can gain an unfair advantage over competitors.

Source: Texas Mutual Insurance Co.