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Snohomish County insurance agent charged
in $233K workers' comp scam

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July 6, 2017 #17-024

EVERETT – A Lake Stevens man who claimed he was too disabled to work at the same time he was running his own insurance agency has been charged with felony theft.

James C. Kooy, 53, pleaded not guilty to first-degree theft Wednesday (July 5) in Snohomish County Superior Court. His trial is scheduled for Sept. 28.  

The Washington Attorney General filed the charge based on an investigation by the Washington State Department of Labor & Industries (L&I). L&I administers the workers’ compensation system that provides medical, vocational and other services to help injured workers heal and return to work.


Operated insurance agency while receiving workers’ comp

Kooy filed several injury claims with L&I over the years, including one in January 2008 for a knee injury he suffered while working as a heavy equipment operator. Two years later, he filed a claim for a repetitive-motion injury to his shoulders and hands in the same job.

He began receiving wage-replacement checks from L&I in 2008.

According to the criminal charges, in June 2010, Kooy opened By the Lake Insurance Inc. in Lake Stevens, selling policies through a national insurance company. He listed himself as the company’s president, registered agent and 50-percent owner.

His lawyer notified L&I that Kooy had started the business, and L&I stopped providing the wage replacement benefits. The department later reinstated the benefits after the lawyer said Kooy discovered he was unable to work, and was selling the business.


Business generated $800,000-plus in revenues

In 2015, the department investigated Kooy after learning that he never sold the company and was likely working. The investigation found that Kooy had actually continued to operate the insurance business, which generated more than $800,000 in revenue from mid-2010 to mid-2015.

According to the criminal charges, Kooy sold insurance policies; personally communicated with clients, vendors and marketing companies; and appeared at sales and corporate meetings.

Meanwhile, he failed to tell his physicians and vocational counselor he was working, and falsely declared on L&I forms that he was not working, charging papers said. From August 2010 to April 2015, he received more than $233,000 in wage replacement payments.

Workers who are hurt on the job are sometimes eligible to receive limited replacement of their wages, if their doctor confirms they can’t work because of the injury. Workers, however, must notify L&I if they do work.


For media information, please contact Debby Abe, L&I Public Affairs, 360-902-6043 or

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