After a years-long investigation involving state and local law enforcement teams, Florida authorities have charged seven people in a $100 million workers’ compensation payroll scheme that paid workers in cash and defrauded insurers of premiums.
“This criminal enterprise systematically exploited Florida’s workers’ compensation system for personal gain,” Florida Attorney General James Uthmeier said in a statement in August. “They undercut legitimate contractors, defrauded insurance companies, and operated an illegal money-service operation that moved nearly $100 million.”
The defendants allegedly created a number of shell companies that obtained minimal workers’ compensation insurance coverage by greatly underreporting payroll. They then “rented” their certificates of insurance to subcontractors for a fee. At the same time, the network processed and cashed the contractors’ payroll checks–paying workers in cash through an unlicensed money service business, Uthmeier’s office said.
The defendants, some of them related, include:
- Marlen Suazo Gutierrez, of West Palm Beach
- Gustavo Lara Suazo, of Lake Worth
- Eduardo Blandon Martinez, of West Palm Beach
- Alejandra Lagos Matute, of Lake Worth
- Erick Blandon, of Port St. Lucie
- Blanca Ramirez Farina, of Deerfield Beach
- Eduardo Olivera Leal, of Ocala.
Companies involved included JYK Construction Concrete, Ace Concrete and Pavers, DMF Construction Services, EVB Construction Services and others, according to court filings in Palm Beach and Broward counties.
Insurers that were allegedly defrauded are Pie Insurance, Obsidian Specialty, Kemper Auto Insurance, James River Insurance, ICW Group, Allstate Insurance, MidSouth Mutual Insurance, Kinsale Insurance, Accredited Surety and Casualty, and Gemini Insurance Co., a complaint filed in Palm Beach County Circuit Court shows.
Surveillance operations showed that the defendants worked from a West Palm Beach office to process payroll checks and distribute cash directly to workers. Law enforcement seized more than $2.4 million in connection with the case.
The charges against the seven include fraud and money laundering.
Topics Florida Fraud Workers' Compensation Numbers
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