                          State of New York
                   Supreme Court, Appellate Division
                       Third Judicial Department
Decided and Entered: September 29, 2016                   522265
________________________________

In the Matter of the Claim of
   ROBERT ADAMS,
                    Appellant,
      v
                                            MEMORANDUM AND ORDER
BLACKHORSE CARRIERS, INC.,
   et al.,
                    Respondents.

WORKERS' COMPENSATION BOARD,
                    Respondent.
________________________________


Calendar Date:   September 6, 2016

Before:   Peters, P.J., McCarthy, Lynch, Rose and Clark, JJ.

                             __________


     Walter D. Kogut, Fayetteville, for appellant.

      Wolff, Goodrich & Goldman, LLP, Syracuse (Robert E. Geyer
Jr. of counsel), for Blackhorse Carriers, Inc. and another,
respondents.

                             __________


Clark, J.

      Appeal from a decision of the Workers' Compensation Board,
filed March 9, 2015, which ruled, among other things, that
claimant violated Workers' Compensation Law § 114-a and
disqualified him from receiving future workers' compensation
benefits.

      Claimant sustained a compensable injury to his lower back
in December 2007 and was awarded workers' compensation benefits
from January 14, 2008 to March 1, 2008 and from March 13, 2008 to
                              -2-                522265

September 7, 2010. In November 2009, claimant was convicted of
criminal sale of a controlled substance in the third degree and,
on September 7, 2010, he was sentenced to a prison term of three
years. Claimant did not receive workers' compensation benefits
during his incarceration.

      Upon his release from prison, claimant sought reinstatement
of his wage replacement benefits, and the employer requested that
any award of benefits be held in abeyance pending a determination
of its allegation that claimant had violated Workers'
Compensation Law § 114-a. Following a hearing, a Workers'
Compensation Law Judge (hereinafter WCLJ) determined that
claimant had violated Workers' Compensation Law § 114-a (1) by
testifying at a June 30, 2010 hearing that he had not received
any income while receiving wage replacement benefits when he had
already been convicted for criminal sale of a controlled
substance in the third degree. The WCLJ imposed the mandatory
penalty rescinding the award of workers' compensation benefits to
claimant from May 26, 2009 to September 7, 2010 and a
discretionary penalty disqualifying claimant from receiving any
future wage replacement benefits for his claim. Upon
administrative appeal, the Workers' Compensation Board upheld the
WCLJ's determination that claimant had violated Workers'
Compensation Law § 114-a (1) and the discretionary penalty
imposed, but modified the mandatory penalty imposed to rescind
only the award of benefits received after June 30, 2010 on the
basis that the benefits awarded after that date were directly
attributable to claimant's misrepresentation at the June 30, 2010
hearing. Claimant now appeals.

      Workers' Compensation Law § 114-a (1) provides that, "[i]f
for the purpose of obtaining compensation . . . or for the
purpose of influencing any determination regarding any such
payment, a claimant knowingly makes a false statement or
representation as to a material fact, such person shall be
disqualified from receiving any compensation directly
attributable to such false statements or representations" (see
Matter of Martinez v Kingston City School Dist., 140 AD3d 1421,
1422 [2016]; Matter of Hadzaj v Harvard Cleaning Serv., 77 AD3d
1000, 1001 [2010], lv denied 16 NY3d 702 [2011]). In addition to
rescinding compensation already paid, the Board has the
                              -3-                522265

discretionary authority to disqualify the claimant from receiving
any future wage replacement benefits regardless of "whether or
not the claimant is subject to the mandatory penalty," even if
the claimant has suffered a compensable injury (Matter of Losurdo
v Asbestos Free, 1 NY3d 258, 265-266 [2003]; see Matter of Church
v Arrow Elec., Inc., 69 AD3d 983, 984 [2010]). "'The Board is
the sole arbiter of witness credibility and its determination
that claimant violated Workers' Compensation Law § 114-a will be
upheld if supported by substantial evidence'" (Matter of Petrillo
v Comp USA, 131 AD3d 1282, 1283 [2015], quoting Matter of Hammes
v Sunrise Psychiatric Clinic, Inc., 66 AD3d 1252, 1252 [2009];
accord Matter of Tangorre v Tech Home Elec., LLC, 124 AD3d 1183,
1184 [2015]).

      When questioned at the June 2010 hearing as to whether he
had worked since April 21, 2009 or received any income other than
workers' compensation benefits since then, claimant represented
that he had not, despite having been convicted of criminal sale
of a controlled substance based on his conduct in May 2009 while
receiving workers' compensation benefits. Moreover, claimant
testified at the disqualification hearing that he received drugs
as compensation for his participation in the May 2009 sale.
Inasmuch as the Board is the sole and final arbiter of witness
credibility and entitled to reject claimant's exculpatory
testimony that his criminal activity was not work (see Matter of
Cruz v Buffalo Bd. of Educ., 138 AD3d 1316, 1318 [2016]), the
Board's determination that claimant violated Workers'
Compensation Law § 114-a (1) by making a false representation
regarding material facts for the purpose of obtaining wage
replacement benefits is supported by substantial evidence (see
Matter of Losurdo v Asbestos Free, 1 NY3d at 266; Matter of
Johnson v New York State Dept. of Transp., 305 AD2d 927, 928
[2003]).

      We also reject claimant's contention that his due process
rights were violated because he was not provided with adequate
notice of the false statement that formed the basis of the
employer's allegation that he had violated Workers' Compensation
Law § 114-a (1), and, thus, was denied a fair opportunity to
prepare for his testimony. Both claimant and his attorney were
informed by the WCLJ prior to the disqualification hearing that
                              -4-                  522265

there was an issue of whether claimant violated Workers'
Compensation Law § 114-a (1) based upon claimant's incarceration
for the criminal sale of a controlled substance (cf. Matter of
Schuss v Delta Airlines, Inc., 120 AD3d 850, 851-852 [2014];
Matter of Dishaw v Midas Serv. Experts, 27 AD3d 921, 921 [2006]).
Furthermore, claimant was represented by the same counsel
throughout the relevant proceedings — who also had access to the
transcripts of those proceedings — and claimant was provided with
ample opportunity at the disqualification hearing before the WCLJ
to address the issue of whether he knowingly misrepresented
material facts (see Matter of Robbins v Mesivtha Tifereth
Jerusalem, 60 AD3d 1166, 1167 [2009]).

      Turning to the mandatory penalty imposed, the Board
properly rescinded the prior award of workers' compensation
benefits to claimant from June 30, 2010 to September 7, 2010, as
such benefits were "directly attributable" to claimant's knowing
misrepresentation of a material fact (Workers' Compensation Law
§ 114-a [1]). As for the discretionary sanction of disqualifying
claimant from receiving future wage replacement benefits relating
to the underlying workers' compensation claim, based upon the
Board's finding that the nature of claimant's misrepresentation
and conduct was "egregious," the Board is specifically authorized
under the statute to impose such a penalty, and we decline to
disturb it (see Matter of Losurdo v Asbestos Free, 1 NY3d at 266-
267; Matter of Poupore v Clinton County Hwy. Dept., 138 AD3d
1321, 1324 [2016]; Matter of Lopresti v Washington Mills, 23 AD3d
725, 726 [2005]).

     Peters, P.J., McCarthy, Lynch and Rose, JJ., concur.


     ORDERED that the decision is affirmed, without costs.



                             ENTER:




                             Robert D. Mayberger
                             Clerk of the Court
