Update: Florida Legislature Adopts OFC Workers’ Compensation Fraud Work Group Recommendations, Passes Law Establishing Real-Time Check Cashing Database and Check Casher Reporting Requirements
On April 30, 2013, the Florida Legislature passed House Bill 217, which when signed into law by Gov. Rick Scott, will place additional duties on check cashers by requiring them to log certain transactions in a real-time electronic statewide database. The bill is the latest effort by State officials to combat and prevent MSB-facilitated workers’ compensation fraud. A copy of the bill can be read here.
As we have previously reported, MSB-facilitated workers’ compensation fraud has been in the crosshairs of Florida officials since August of 2011. At that time, the Financial Services Commission of the Florida Office of Financial Regulation issued a cabinet report to Gov. Rick Scott regarding MSB-facilitated workers’ compensation schemes. The report revealed that MSBs have played an active, critical, and sometimes unknowing part in defrauding the workers’ compensation insurance market in Florida. As a result of these findings, Florida C.F.O. Jeff Atlwater announced the creation of the “MSB Facilitated Workers’ Compensation Fraud Workgroup” to develop comprehensive reforms to combat the fraud scheme. Our previous reports, detailing the fraud scheme, the OFR cabinet report, and the activities of the MSB Workers’ Compensation Fraud Workgroup can be read here, here, here, and here.
The new legislation adopts several of the Workgroup’s recommendations for curbing MSB-facilitated fraud. (A complete list of the Workgroup’s recommendations can be read here.) Once signed into law, House Bill 217 will require check cashers to submit the following information to the electronic check cashing database prior to cashing any checks of an amount greater than $1,000: 1) the transaction date; 2) the payor’s name; 3) the payee’s name; 4) the name of the conductor of the check cashing transaction if different than the payee; 5) the amount of the payment instrument; 6) the amount of currency provided; 7) the type of payment instrument; 8) the fee charged for cashing the payment instrument; 9)the location where the payment instrument was accepted; 10) the type of identification and identification number presented by the payee/conductor; and 11) the payee’s workers’ compensation insurance policy number. The legislation also requires that if multiple checks totaling $1,000 or more are cashed by any one person in one day, the amounts of each transaction must be aggregated, thus triggering a reporting requirement.
The new check cashing database will also be able to interface with databases which currently exist for the Secretary of State and the Department of Financial Services for purposes of verifying corporate registration and determining proof of workers’ compensation coverage. The Office of Financial Regulation believes that the ability to interface and receive real time information between agencies will allow law enforcement to more effectively track and investigate potential fraud. A copy of the Office of Financial Regulation’s press release can be read here.
Fuerst Ittleman David and Joseph will continue to monitor this situation as implementation of House Bill 217 will result in fundamental regulatory changes for the Florida MSB industry. If you have questions pertaining to the Florida Office of Financial Regulations, the BSA, anti-money laundering compliance, or how to ensure that your business maintains regulatory compliance at both the state and federal levels, please contact us at email@example.com.