well, I am just remembering this ruling...
http://www.insurancejournal.com/news/west/2005/10/20/61033.htm
Frankly, they should have been fined for admittedly hiring an illegal alien, but naturally nothing happened to the employer and the employee got to collect benefits and the insurance company (and ultimately you and me) had to pay for it -- (and my guess is that if they are willing to hire illegal aliens, they are probably willing to fudge on their payroll audits).
Most of the Workers Comp insurance fraud is from employers who under-report payroll or who pay employees under the table or call them "clerks" when they are unloading trucks or working on roofs.
"We can't reward people for breaking the law," said Andy Ramirez, a spokesman for Friends of the Border Patrol, a Covina-based group that sends members to patrol the U.S. border with Mexico.
Like the employer was not breaking the law. LOL!