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From Blog What is Workers' Compensation Fraud
Tuesday March 6, 2007
LINK: http://classiccarinsuranceimpfjzoi.blogspot.com/2007/03/what-is-workers-compensation-fraud.html # posted by keithfhu : 5:41 PM
6 Arrested in Workers' Comp Scam
BOCA RATON -- State and local officials arrested six men allegedly involved in a multimillion-dollar workers' compensation insurance scheme involving hundreds of general contractors throughout South Florida.
The group made millions cheating workers' compensation insurance by creating bogus subcontracting companies that lied about their number of employees, said Lt. Vance Akin, of the state Department of Financial Services' insurance fraud division.
Two bogus companies raked in about $15 million after legitimately insuring one or two people, investigators said. Contractors who were in on the scheme gave the subcontractors a check to be cashed at a South Florida check cashing store. Investigators said the contractors then hired uninsured workers and paid them cash under the table.
After people at the check cashing store and the subcontractors got their cuts, the money funneled back to the general contractors, who often paid employees in cash, Akin said.
Authorities raided the check cashing store and two Boca Raton homes this week, seizing about $1 million cash. Also, $1 million was frozen in several bank accounts, the South Florida Sun-Sentinel reported.
Francisco Nunes, 38, of Boca Raton, Marco Delgado, 26, of Boca Raton, Edigar Neves, 46, of Pompano Beach, were arrested Friday in the elaborate scheme. Amjad Shafiq Abuzahra, 36, Mohammad Sulaiman Salameh, 47, and Zeid Hasan Daas, 37, were arrested at the check cashing store.
The men face charges of racketeering and conspiracy to commit racketeering. Authorities are also investigating more than 250 South Florida contractors, Akin said.
It was not known whether the men arrested were represented by attorneys.
Roofer ordered to pay $1.4 million
Nancy Isles Nation - Marin Independent Journal - Posted 2/10/05
A San Rafael roofing contractor was ordered to pay $1.4 million in restitution and to perform 200 hours of community service for cheating the state of insurance and tax money over four years.
To fulfill his community service obligations, Kenneth Scott Cooper, 50, was ordered Tuesday to provide residential roofing for two nonprofit or charitable organizations in the county.
Cooper also was ordered by Marin Superior Court Judge Terrence Boren to pay $50,000 for insurance code violations and cover the cost of the investigation by the state Franchise Tax Board.
In November, Cooper admitted to committing one count each of filing false statements with the state Department of Insurance, making false statements to the Employment Development Department and filing false income tax reports with the Franchise Tax Board.
Cooper's under-reporting began in Jan. 1, 1999, when he tried to reduce his workers' compensation premiums by paying workers partially in cash so their paycheck stubs reflected lower wages than they actually earned, according to prosecutors.
The false workers' compensation reporting forced Cooper to repeat the false information on employment development and state tax forms.
"The thing people need to remember is tax cheating is not a victimless crime," said
John Barrett, a spokesman for the Franchise Tax Board. "The victims are you and me."
The scam came to light when a worker for Ken Cooper Roofing and Gutter Systems was injured on the job and a workers' compensation attorney noticed an irregularity in the information provided.
Pam Taylor, an investigator with the state Department of Insurance, spent two years reviewing the case before charges were filed.
The department found that in addition to paying part of the wages under the table, Cooper indicated that he paid the worker more than average because insurance rates are reduced for experienced, skilled workers.
"It's important to remember for failing to file a few years of taxes, he has had to pay attorney's fees and fines and do community service," Barrett said.
"All for nothing," he said, "there's a public embarrassment and time missed from work."
Neither Cooper nor his attorney, James Collins, could be reached for comment Tuesday.