2 Mass. Roofing Company Owners Indicted for Alleged Work Comp Fraud

March 25, 2015

Two business owners in Milford, Massachusetts, have been indicted in connection with failing to accurately report their total payroll and workforce to avoid paying hundreds of thousands of dollars in insurance premiums, authorities announced.

Massachusetts Attorney General Maura Healey’s office announced Tuesday that Segundo Nicolas Muyubisnay Cungachi was charged with Workers’ Compensation Fraud (five counts) and Larceny Over $250 (two counts), and Maria Alegria Morocho Munoz (Morocho) was charged with Workers’ Compensation Fraud (two counts) and Larceny Over $250 (two counts).

According to authorities, Cungachi and Morocho formed three Milford area roofing companies between 2008 and 2014: Byron Construction in 2008, Nationwide Construction Corporation in 2010, and First Nationwide Construction Corporation in 2012. Each company was allegedly insured for workers’ compensation and were each assigned premiums based on their reporting.

Officials noted that the Workers’ Compensation Ratings and Inspection Bureau (WCRIB) establishes different categories of policy cost depending on the risk of injury associated with different types of jobs and applies the payroll and size of workforce to premium rates.

Authorities allege that based on their reporting, Cungachi and Morocho were granted lower premium rates on their company policies. As a result of this alleged scheme, Cungachi and Morocho put the insurance companies unknowingly at risk to cover any undisclosed employees for injuries that occurred or may have occurred during the policy periods and avoided paying more than $615,000 in insurance premiums.

The Insurance Fraud Bureau of Massachusetts (IFB) referred these cases to the Massachusetts attorney general’s office after an investigation into reports that the companies were committing insurance fraud.

A Worcester County grand jury in Massachusetts returned indictments against Cungachi and Morocho last week. Authorities said the defendants will be arraigned in Worcester Superior Court at a later date.

Source: Massachusetts Attorney General Maura Healey’s office

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