Former San Antonio Councilman Disbarred for WC Fraud

Texas Mutual Insurance Company reported that the Texas State Bar has permanently disbarred Bernardo Eureste, a Houston attorney and former San Antonio city councilman. Eureste has not practiced law since June 2002, when he was sentenced to three years’ probation for workers’ compensation fraud-related charges.

Eureste’s legal problems began when Texas Mutual Insurance Company (then called the Texas Workers’ Compensation Insurance Fund) uncovered billing irregularities by Eureste’s law firm. The investigators shared their findings with the Texas Workers’ Compensation Commission (TWCC) and the FBI.

The investigation revealed that Eureste had devised a scheme to defraud his clients by submitting false claims and often billing identical hours on different clients without any variation. “Eureste used a computer software program to fly under the radar, so to speak, and bill for an average of 90 hours per day, seven days per week, including weekends and holidays,” explained Elliott Flood, vice president of Special Investigations for Texas Mutual Insurance Company. The scheme allowed Eureste to receive up to 25 percent of his clients’ temporary income benefits (TIBs) after TWCC approved his bills for file reviews.

At last week’s hearing, Assistant Disciplinary Counsel Michael E. McClendon said Eureste had stolen from his clients, many of whom were poorly educated, lower income injured workers. McClendon used Flood’s testimony to support his call for disbarment. Responding to McClendon’s questions, Flood estimated that Eureste had over-billed his clients by as much as $1.4 million in a one-year period.

“This case was unique in my experience,” said Flood, after the hearing. “As a carrier, we were not damaged by Eureste’s actions, but some of our policyholders’ injured workers were. We pay the same amount of TIBs regardless of whether the injured worker retains an attorney. The attorney’s fee is deducted from the injured employee’s TIBs check. So really, Eureste wasn’t bilking Texas Mutual; he was cheating his own clients, injured workers who could least afford it.”