For Immediate Release - March 13, 2013

Former Suffolk County Corrections Officer and Athol Man Arraigned for Fraudulently Collecting Benefits while Working

Men Collected More Than $350,000 in Overpayments from the State

BOSTON – A former Suffolk County corrections officer and another man, both from Athol, have been arraigned in connection with fraudulently collecting tens of thousands of dollars in workers’ compensation, disability, and retirement benefits while working, Attorney General Martha Coakley announced today.

Paul Mahan, 42, is charged with Workers’ Compensation Fraud and Larceny by False Pretenses. Kelly Walsh, 42, is charged with Larceny by False Pretenses.

State and federal law requires claimants of injury related benefits to periodically make certain disclosures that may include but are not limited to the certification of their employment status, condition of health, and any earnings while receiving compensation.

Authorities allege that on several dates between January 2007 and January 2013 Mahan and Walsh ran car dealerships in Winchendon and Orange and partnered with another venture while collecting tens of thousands of dollars in benefits derived from previous work related injuries. During this time the defendants allegedly failed to disclose any earnings or their work status to the appropriate agencies.

Mahan began working as a correction officer for the Suffolk County Sheriff’s Department (SCSD) in May 2000. Within three months Mahan sustained a knee injury while on the job that was immediately reported to the Department of Industrial Accidents (DIA). The SCSD, a formerly independently insured agency, began paying Mahan benefits retroactive to the date of the injury without contending the findings of the DIA.

In succeeding years Mahan underwent Independent Medical Exams (IME) as required by DIA, with varying medical opinions of the severity of his condition and ability to work, in order to receive benefits. In May 2006, Mahan was ultimately determined by a judge to be permanently and totally disabled. A recipient of permanent total benefits may collect payments indefinitely.

As the result of these rulings Mahan was ultimately able to collect three separate checks each month for the injury sustained during his three month tenure at the SCSD: workers’ compensation benefits, Assault Pay, and retirement benefits. The collection of these benefits amounted to payments totaling more than 100% of Mahan’s salary at the SCSD each month.

After paying Mahan benefits for six years, the SCSD initiated periodic surveillance of Mahan in June 2006. Authorities allege that on various occasions between 2006 and 2011, surveillance established that Mahan and his friend, Kelly Walsh, were working regularly at Shamrock Motors of Winchendon, a business officially registered in the name of Mahan and Walsh’s wives, performing a variety of tasks on and off site. According to authorities Walsh was also collecting disability through the federally administered Title II Disability Benefits, subsequent to a back injury sustained in May 2004.

Authorities further allege that Mahan and Walsh derived an income from Shamrock Motors. An investigation into the bank accounts associated with the business revealed numerous checks made payable to Mahan, Walsh and their wives totaling more than $385,000. 

Further investigation revealed that in June 2007 Mahan and Walsh were allegedly employed at another auto dealership in a contract partnership that paid the defendants $38,000 upon their separation.

Authorities allege that as a result of Mahan’s failure to report his income he received an overpayment of more than $203,000 in workers’ compensation benefits from his employer’s insurance carrier, more than $125,000 in Assault Pay and more than $49,000 in retirement benefits. Walsh received an overpayment of more than $46,000 in social security disability benefits during the time of the alleged fraud.

A Suffolk County Grand Jury returned indictments against Mahan and Walsh on February 19. The defendants were arraigned today in Suffolk Superior Court where they each pleaded not guilty and were released on personal recognizance. Mahan and Walsh are each scheduled for a pre-trial conference on May 21. Clerk Magistrate Gary Wilson presided over the arraignments.   

AG Coakley’s Insurance and Unemployment Fraud Division works to protect consumers and the integrity of the insurance system by investigating and prosecuting those who commit fraud against all types of insurers, including the Commonwealth’s unemployment insurance and workers’ compensation system. The prosecution of insurance fraud helps prevent the increase in premiums and taxes that are the result of fraudulent insurance claims. In 2012, the IUFD obtained more than $1,647,000 in restitution orders in 32 matters.

The case is being prosecuted by Assistant Attorney General Joshua Pakstis of AG Coakley’s Insurance and Unemployment Fraud Division with assistance from investigator Tracy Wetterlow of the Attorney General’s Office and investigators Kyle Zgraggen from the Office of the Inspector General. 


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