Local private investigator specializes in workers compensation cases

Jeff Stewart, founder of an Inland private investigation agency, has seen some strange cases during his 26 years on the job. One even involved mayonnaise.

Meet Jeff Stewart, the man who helped solve The Great Mayonnaise Caper.

Stewart, is chief executive officer of SIS Investigations in Rancho Cucamonga, which specializes in workers compensation and corporate malfeasance cases. A Riverside native and a graduate of Ramona High School, Stewart founded SIS in 1987.

The company has been involved in several high-profile cases, including an audit it conducted for the Rialto Unified School District in connection with Judith Oakes, a former accountant with the district suspected of embezzling more than $3 million from the district’s nutrition department over 14 years.

Four years ago, Stewart and his colleagues embarked on one of their most memorable cases. A nationally-known mayonnaise company was missing $500,000 in inventory from a third-party warehouse it was using in Mira Loma.

If the theft was in inside job, the company would have to pay only 10 percent of its insurance deductible, or $50,000.

However, if the missing mayo was stolen by outsiders, or if the theft stayed unexplained, the company would owe its insurer half a million dollars. What the made the case difficult was that SIS had only four days to figure out what happened.

Acting on the hunch that warehouse employees were responsible, SIS began interviewing workers, all of whom claimed to know nothing about the missing jars of mayonnaise.

“We were suspicious of the night shift, because that was the one time there were no managers around,” Stewart said.

After a series of interviews, SIS had nothing. The warehouse workers stuck to their story, leaving the investigation at an impasse.

Then SIS got lucky. One of the workers said a co-worker who was constantly borrowing money suddenly had plenty of ready cash. After some intense questioning by SIS, the man confessed and named his co-conspirators. No charges were filed, but the two dozen or so workers involved were fired.

“We spent about 48 hours figuring it out,” Stewart said.

It was not a sophisticated heist: workers loaded delivery trucks with a few extra pallets, made their usual deliveries and sold the extra goods on the black market, possibly in Mexico.

Because there was no management supervision, and because the warehouse took inventory every six months, the extra pallets of mayonnaise were off the books and went undetected.

“It seemed like everyone was in on it,” Stewart said. “It’s surprising it held together as long as it did. But the important thing is we saved the client $450,000.”

When an identical theft of $1 million worth of plasma televisions happened a year or so later at another Inland warehouse owned by the same third-party logistics company, SIS was asked to investigate.

“That one was a little easier to solve because we knew what to look for,” Stewart said. “I remember we got seven confessions in that case. One thing about this business is you see the same things over and over again. The scams are basically the same.”

Stewart got his first look at crime inside a business in the early 1980s. After getting a degree in criminal justice from Riverside Community College, Stewart went to work at an automobile dealership owned by Vic Jones, the former Riverside Chief of Police.

Jones did not hire Stewart to sell cars. Jones suspected that some of his salesmen were dealing drugs, and Stewart was to go undercover as a salesman and find out the extent of the problem.

During his four months on the job, Stewart found that he had talent for investigative work, and that he enjoyed doing it, despite its occasional scary moments.

“They were dealing inside the agency, not outside,” Stewart said. “It was just a few people involved, but I was able to figure out what was going on, and I learned about the [investigative] business.”

What he learned was that being an investigator requires a lot of nerve, some courage and a measure of acting skill.

“I got to know how to pull information out of people, but when you’re investigating there’s a lot of misdirection involved in that,” Stewart said. “You have to get the information without people knowing you’re going after it. They can’t know why you’re asking the questions you’re asking.”

Stewart spends much of his time today investigating fraudulent workers compensation claims, which have become the bane of many employers and insurance companies in California.

California law requires that workers be paid for time lost because of an on-the-job injury, but inevitably people take advantage of the system, at great expense to the state. They claim time off for injuries they didn’t sustain on the job, exaggerate an injury or file a claim for something that didn’t happen.

During the 2011-’12 fiscal year, the state Department of Insurance’s fraud division spent more than $53 million investigating worker’s compensation insurance fraud, and nearly $362 million in fraudulent claims may have been paid by insurance companies during that time, according to the state of California’s website.

That’s why Stewart spends much of his time on surveillance cases, videotaping people who, though claiming to be too injured to work, might be at the beach, playing sports or doing heavy lifting.

“Workers comp gets absolutely crazy sometimes,” he said. “Doctors filing false reports, and people in wheelchairs who have nothing wrong with them. You see that stuff all the time.”

Catching people in the act is not the best part of the job.

“I enjoy the surveillance work, but what I really enjoy is solving the case,” Stewart said. “I like coming to a conclusion. Every case is different, and on every case you learn something.”

Surveillance work can be dangerous, depending on who’s being watched and how close you have to get to the subject, but Stewart said he’s never felt threatened.

“About the worst thing that ever happened was my car was surrounded by gang members one time,” he said. “ But I’ve never been in a fight. If I ever let something get that far I would have failed at my job.”

Evidence in all workers compensation fraud cases are given to the insurance department in Sacramento and the local district attorney’s office for possible prosecution, even though criminal convictions in those cases are extremely rare, said Darlene Baumgartner, an insurance claims representative for Loma Linda University Medical Center.

Good videotape can be crucial in proving a fraudulent claim, and Steward is adept at getting good information on tape, Baumgartner said.

“Jeff does a very professional job,” said Baumgartner, who has worked with SIS for nearly 15 years. “Workers comp cases are hard to prosecute, so the better evidence you have the better chance you have of getting some money back.”

More employers and insurance agencies are hiring private investigators to help them with workers compensation cases, said Nancy Kincaid, spokeswoman for the state insurance department.

“I think it’s accurate to say it’s a growing trend, because there are so many cases out there,” Kincaid said. “They get filed more during a bad economy.”