One of our favorite cases from 2011 was Young v. Newport News Shipbuilding & Dry Dock Co., BRB No. 10-0678 (BRB 6/22/11), wherein the Benefits Review Board (“BRB”) determined that illegal earnings still constitute “earnings” that must be reported to an employer. Our post discussing the original Young decision is here. On Halloween 2013, the BRB issued a new decision against Mr. Young, who continued his attempts to circumvent the reporting requirements of Section 8(j).
Section 8(j) of the Longshore and Harbor Worker’s Compensation Act allows an employer to ask their injured worker to disclose any earnings over a specific period of time during which the worker received disability benefits. If the employee “knowingly and willfully omits or understates any part of such earnings . . . [the employee] forfeits his right to compensation with respect to any period during which the employee was required to file such report.” See 33 U.S.C. § 908(j). In the original Young decision, the BRB determined that the term “earnings” includes all monies, revenues, or fees earned from illegal activities.
In his newest appeal, Mr. Young contended that he did not “knowingly” or “willfully” fail to report earnings, and that there was no tangible evidence that he, in fact, had earnings. By tangible evidence, Mr. Young meant “checks, bank statements, receipts from purchases made, etc.” Further, Mr. Young argued that he was convicted of conspiracy and not for actually selling or distributing drugs, and that he did not handle any finances from the illegal activities. Both the administrative law judge (“ALJ”) and the BRB disagreed.
The record contained enough evidence such that the ALJ could conclude that Mr. Young profited from his illegal activities. The record included a Grand Jury indictment filed against Mr. Young, a guilty plea entered by Mr. Young, a prosecutor’s affidavit discussing the financial role Mr. Young played in his conspiracy, and the fraudulent Form LS-200s. The submission of these documents, even in the absence of any checks or receipts, was enough to establish a Section 8(j) violation because such a violation can be proven with “any other evidence showing earnings[.]” See 20 C.F.R. § 702.286(b). As the BRB concluded:
Although there was no specific evidence of earnings claimant derived from his criminal activity, it was reasonable for the administrative law judge to infer that claimant earned money by engaging in the activities described in the indictment, to which he had pleaded guilty, and that the restitution he agreed to pay was disgorgement of his criminal proceeds. Thus, as the inference is rational and supported by substantial evidence, we affirm the finding that claimant knowingly and willfully omitted reporting his post-injury earnings in an attempt to conceal them.
Opinion: This is a good decision. It should be published instead of unpublished.
(Note: I originally published this post on Navigable Waters: A Maritime, Longshore and Defense Base Act Blog.)