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60 days behind bars for former insurance agent in $233K workers' comp scam

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November 27, 2017 #17-045

Everett – A Lake Stevens man who ran his own insurance agency while claiming he was too disabled to work must serve 60 days in jail.

James C. Kooy, 53, was sentenced today, Nov. 27, on one count of first-degree theft for wrongfully receiving more than $233,000 in workers' compensation payments from the Washington State Department of Labor & Industries (L&I).

Kooy had pleaded guilty to the felony charge in Snohomish County Superior Court in September. Judge Bruce Weiss also ordered Kooy to repay the state for an amount to be determined at a hearing in March.

"This case was truly outrageous. He worked for at least five years in his own business without telling us or his doctors," said Elizabeth Smith, assistant director of L&I's Fraud Prevention & Labor Standards.

"By cheating to get cash benefits, he took money away from legitimately injured workers who really do need help to heal and get back to work."

Business generated $800,000 in revenue

An L&I investigation determined Kooy owned and operated By the Lake Insurance Inc. at the same time he claimed to be too injured to work and was receiving workers' comp benefits. Over that five-year period ending in April 2015, the investigation found the Lake Stevens business generated more than $800,000 in revenue.

The Washington Attorney General's Office prosecuted the case as an "aggravated," or especially serious, offense because it happened over a long time, and involved multiple acts as well as the loss of a large amount of money. Aggravated cases can result in more severe punishment.

Said he would sell business

Kooy, who had earlier twisted his knee while working as a heavy equipment operator, began receiving partial wage replacement benefits from L&I in 2008.

In June 2010, he opened his insurance agency, so L&I stopped providing the cash benefits. The department later reinstated the wage replacement checks after his lawyer said Kooy was unable to work and planned to sell the company, according to charging papers.

Fails to tell doctors, falsely declares to L&I

In 2015, L&I began investigating Kooy after receiving information that he did not sell the business and was likely working. The investigation found Kooy still owned the business and was selling insurance policies, attending business meetings and personally communicating with clients and vendors.

At the same time, he didn't tell his physicians and vocational counselor he was working, and falsely declared on L&I forms that he was not working — all deceptions that enabled him to keep getting state wage replacement checks.

Injured workers must tell L&I if they work

L&I administers the state workers' comp insurance system that provides medical, vocational and other services to help employees injured on the job heal and return to work.

Injured workers 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: Debby Abe, L&I Public Affairs, 360-902-6043.

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