EMPLOYEE/COMP TERMINATION ISSUE

How do you handle an employee situation of the following:

Employee never worked a full 40 hour week, then decided a couple months ago, he was having a problem with his wrist. Contacted worker's compensation and the employee went on comp. A few weeks ago, he was released to light duty and we had a 40 hr "light duty" position for him, but the employee never showed up. We called several times with no response from the employee. So comp didn't pay him and we were not paying him Now rumor has it the employee is in criminal trouble and may be in jail. How and can we terminate his employment properly? Does Work comp have to dismiss his claim?? Any help would be apprecited.

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