The owners of the popular East Austin restaurant La Barbecue are being indicted on fraud charges related to a 2016 insurance claim, according to a news release issued by the Texas Department of Insurance (TDI) on August 23.
The married couple, founder LeAnn Mueller and manager Allison Clem, have been summoned to appear in Travis County District Court on September 28 for allegedly carrying out a workers’ compensation fraud scheme, which resulted in a payout of more than $350,000 in medical and indemnity benefits to an injured employee.
According to TDI, the case began sometime in late July 2016 after an unnamed employee was badly hurt while working with kitchen equipment when the business was operating as a food truck parked at 1906 East Cesar Chavez Street. Mueller and Clem were allegedly made aware of the injuries that day. At the time, the business didn’t have workers’ compensation coverage; the TDI report states that four days after the incident, Clem reached out to Paychex Insurance to acquire it.
In the release, the TDI Fraud Unit says that Clem did not disclose the incident or the employee’s injuries to the insurance agent, and that she asked for the new policy to be backdated to July 1, 2016 — three weeks prior to the employee sustaining their injuries. TDI says that Mueller then signed an application for coverage without reporting any claims, which allowed Travelers Casualty Insurance Company of America to approve the policy.
The release goes on to say that, after the policy was in place, the restaurant submitted a claim to Travelers for the injured employee, which was approved, resulting in the payout of more than $350,000 in benefits. According to the TDI release, the insurance company also assumed lifetime care for the injured employee. The exact injuries have not been made public at the time of publishing.
In a statement from their lawyer, Clem and Mueller confirm that an employee was injured in 2016 and that they got a backdated insurance policy to cover it. “It is perfectly legal to obtain a backdated policy in Texas,” the statement reads. Mueller and Clem “believed they were acting in good faith at all times when they signed the application that had been provided to them by the insurance agent.” They also said that the insurance money went to the employee to pay for their medical bills, not to the restaurant, Mueller, or Clem. “We believe once a jury hears the facts, that La Barbecue, Leanne [sic] Mueller, and Allison Clem will be exonerated,” the statement concludes.
A case summary from the 147th District Court states the official offense as “fraudulent securing document execution,” which is considered a felony. If found guilty, it’s possible that Mueller and Clem would be ordered to pay restitution up to double the amount Travelers already paid to the injured worker in benefits, according to TDI. In the state of Texas, employers are not required to have workers’ compensation coverage, but it is at their own risk, as lack of coverage leaves businesses open to potential injury lawsuits from employees.
The date for the pre-trial hearing is September 27.
Eater has reached out to TDI and the Travis County District Attorney’s Office for further comment.
Update, Wednesday, August 24, 11:08 a.m.. This article, originally published on Tuesday, August 23 at 2:59 p.m., has been updated to include a statement from Clem and Mueller’s lawyer.