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FOR IMMEDIATE RELEASE
July 22, 2014
Spokane businesswoman charged with defrauding state in $101,000 disability scam

Courtesy of the Department of Labor & Industries

Spokane – A Spokane woman stands accused of raking in more than $100,000 in disability benefits while working with her husband to operate his motel, and their nightclub and apartment building.

The Washington Attorney General's Office has charged Mistie S. Crosby, 52, with one count of first-degree, felony theft. Crosby is slated to appear on the charge in Spokane County Superior Court on July 23.

The case resulted from a Washington State Department of Labor & Industries (L&I) investigation.

Crosby said she hurt her back, neck and shoulder in September 2010 while working at Sunset Junction, a nightclub in Spokane that has since closed. According to charging papers, she filed an injured workers' claim, physicians confirmed she was injured, and L&I opened her claim.

No mention of ownership

When submitting the claim form, Crosby did not divulge if she was an owner, partner or corporate officer in the business where she was injured. Business owners must provide employees with workers' compensation insurance, but the coverage is optional for the owners themselves. Crosby never signed up for the insurance.

From the time she was injured through early 2013, Crosby received nearly $59,000 in wage-replacement payments and more than $42,000 in medical and vocational benefits from L&I. During that period, she signed official forms certifying she was not working and incapable of working due to her on-the-job injury.

Undercover investigation

However, an L&I investigation revealed that Crosby was working at the Lascelle Motel and an apartment complex while she was receiving the workers' comp benefits, charging papers said. At one point, she even showed apartments to an undercover investigator, and easily climbed stairs as the investigator watched.

In an interview in February 2013, Crosby told the investigator she co-owned the nightclub, motel and apartment complex, and played an integral role in each business, charging papers said.

L&I began the investigation based on a tip that Crosby was more active than she was reporting to L&I, and that she might be helping at the nightclub.

"We investigate every tip," said Doric Olson, deputy assistant director of Fraud Prevention and Labor Standards. "Rooting out fraud allows us to protect the system for workers who are truly injured."

To report cases of suspected fraud, go to Lni.wa.gov/Fraud or call 1-888-811-5974.


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The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Attorney General Bob Ferguson is working hard to protect consumers and seniors against fraud, keep our communities safe, protect our environment and stand up for our veterans. Visit www.atg.wa.gov to learn more.

CONTACT:
Alison Dempsey-Hall, Interim Communications Director, (206) 442-4482, alisond@atg.wa.gov

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