Workers' Comp Fraud: Employee Charged for $80,000 Benefits

WA L&I Newsroom

Filed March 25th, 2026

Detected March 26th, 2026

Summary

The Washington State Department of Labor & Industries (L&I) has uncovered workers' compensation fraud by an Arlington man who allegedly collected over $80,000 in benefits while working for two out-of-state employers. The individual faces a theft charge, and L&I is emphasizing that all employers operating in Washington must adhere to state regulations.

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What changed

The Washington State Department of Labor & Industries (L&I) has filed charges against Jon Paul Traff, 49, for allegedly defrauding the workers' compensation system of over $80,000. Traff is accused of claiming to be too injured to work from a 2017 injury while simultaneously being employed and paid by two out-of-state companies, Mission Foods and Flowers Baking Co. The investigation revealed that Traff continued to file claims and sign forms indicating he was unable to work from his initial injury, despite being employed by Flowers Baking Co. for over a year and receiving a salary.

This enforcement action highlights L&I's commitment to investigating fraud within the state's workers' compensation system, regardless of employer location. The case serves as a reminder that out-of-state employers with employees working in Washington are subject to Washington's labor laws and workers' compensation regulations. The Washington State Attorney General's Office filed the theft charge, and L&I encourages the public to report suspected workers' compensation fraud.

What to do next

Review internal processes for verifying employee work status and injury claims.
Ensure compliance with Washington State workers' compensation laws for all employees working within the state, regardless of employer headquarters.
Report any suspected workers' compensation fraud to L&I.

Penalties

Theft charge, facing potential penalties associated with first-degree theft and restitution for benefits received.

Source document (simplified)

L&I uncovers workers’ comp fraud by local employee of two out-of-state employers

March 25, 2026 #26-04 ARLINGTON — An Arlington man who worked for two out-of-state companies is facing a theft charge in connection with a Washington Department of Labor & Industries (L&I) workers’ compensation fraud investigation.

Jon Paul Traff, 49, is scheduled for a pre-trial hearing in April in Snohomish County Superior Court. He pleaded not guilty to a single count of first-degree theft in February.

According to the charging papers, Traff received more than $80,000 in workers’ compensation benefits after claiming he was too injured to work.

“After getting hurt at one job, and getting time-loss benefits for being too injured to work, Mr. Traff got hurt again at a second job, and tried to claim benefits for that injury, too,” said Randy Littlefield, deputy assistant director of L&I’s Customer Service, Compliance, and Public Safety Division. “This type of fraud hurts the employer, and hurts people with legitimate injuries who need help.”

L&I claims managers and investigators were alerted to the potential for fraud when Traff filed a claim with the second company, even though he shouldn’t have been working at all.
Out-of-state employers
In 2017, Traff worked as a district sales manager for Mission Foods. That May, he filed a claim with L&I for an on-the-job injury involving his back, neck and shoulders. He received workers’ compensation payments and worker retraining benefits.

In July 2024, Traff filed a second claim with L&I while working as an area sales director with a second firm, Flowers Baking Co. In reporting the injury, Traff said he worked at Flowers for a year and eight months.

L&I claims managers and investigators did the math: The second claim overlapped with the first. While Traff was working at Flowers he signed 78 worker-status forms telling L&I he was still too hurt to work from the injury at Mission. While at Flowers, he was paid a salary of more than $68,000.

Mission Food’s parent company is headquartered in Texas. Flowers Baking is headquartered in Oregon. Both have locations in the same Everett facility.

“Even if someone is working in Washington for an out-of-state company, they still need to follow the rule,” Littlefield said. “We’re watching to make sure they do.”

L&I oversees the state’s workers’ compensation system and helps injured workers heal and get back to work. The Washington State Attorney General’s Office filed the charges based on L&I’s investigation. ****

Report workers’ comp fraud If you see or suspect someone is cheating the workers’ compensation system, contact L&I's Fraud division (Lni.wa.gov/Fraud) or call 1-888-811-5974.