N.J. Roofing Company Exec Gets Jail Time for Misleading Workers’ Comp Carrier

June 6, 2014

New Jersey authorities said the president of a New Jersey roofing company was sentenced to jail Friday for providing false and misleading information to the company’s workers’ compensation insurance carrier to avoid paying hundreds of thousands of dollars in premiums that he was obligated to pay.

New Jersey’s Acting Attorney General John J. Hoffman said Charles Kelcy Pegler was sentenced to 180 days in county jail as a condition of three years of probation by Superior Court Judge Anthony J. Mellaci Jr. in Monmouth County.

Pegler was also ordered to serve 150 hours of community service and to pay at $15,000 criminal fine. He previously paid full restitution to New Jersey Manufacturers Insurance Company and to Atain Insurance Company. The sentence was based on Pegler’s April 17 guilty plea to third-degree insurance fraud. He was charged in a Dec. 19, 2013 state grand jury indictment.

“This defendant had a legal and moral obligation to provide full and adequate workers’ compensation insurance coverage for his employees,” Acting Attorney General Hoffman said. “By failing in this duty, Mr. Pegler defrauded not just his employees and his insurance company, but also honest, hard-working New Jerseyans who are forced to pay increased premiums to cover the costs of the fraud.”

“The jail time imposed upon this defendant should act as a deterrent to anyone who fails to provide adequate and lawful workers’ compensation insurance,” New Jersey’s Acting Insurance Fraud Prosecutor Ronald Chillemi said. “Such frauds will not be tolerated and will be investigated and prosecuted to the fullest extent of the law.”

Pegler was the president of Roof Diagnostics Inc.(RDI), a Monmouth County, N.J.-based roofing company that employs some 400 people. In pleading guilty, he admitted that between June 2003 and October 2009, he created the false impression to New Jersey Casualty Insurance Company, a subsidiary of New Jersey Manufacturers Insurance Company, that RDI was not a roofing company, that it did not employ roofers and that it did not install, maintain and/or repair roofs.

An investigation by the Office of the Insurance Fraud Prosecutor determined that, as a result of the alleged crime, RDI paid $265,044 less in workers’ compensation insurance premiums than it should have.

Pegler further admitted that between January and December of 2009, he created the false impression to USF Insurance Company, now called Atain Insurance Company, that all roofing and re-roofing services offered by RDI were performed by subcontractors. Through this fraud, Pegler avoided paying $134,087 in general liability insurance premiums which he owed to the insurance company, authorities said.

Source: New Jersey Office of The Attorney General

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