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Spokane woman accused of defrauding $100k in disability from the state | Crime

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Spokane woman accused of defrauding $100k in disability from the state
Crime, News
Spokane woman accused of defrauding $100k in disability from the state

A Spokane woman is charged first-degree felony theft, accused of defrauding the state of $101,000 in disability benefits while working with her husband to operate his motel and their nightclub and apartment building.

In September 2010, 52-year-old Mistie Crosby submitted a claim to Labor and Industries (L&I) saying she hurt her back, neck and shoulder while working at Sunset Junction, a nightclub in Spokane that has since closed. Physicians confirmed she was injured and L&I opened her claim.

When Crosby submitted the claim, she did not indicate whether she was an owner, partner or corporate officers 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 and Crosby never enrolled.

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 payments. She also signed official forms certifying she was not working and incapable of working due to her on-the-job injury.

An L&I investigation, however, found that Crosby was working at the Lascelle Motel and an apartment complex while she was receiving the workers' comp benefits. At one point, according to charging papers, 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.

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.”

Crosby is slated to appear on the charge of first-degree felony theft in Spokane County Superior Court today.

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