New York Contractor Charged with $160K Workers’ Comp Insurance Fraud

A Long Island contractor has been charged with workers’ compensation fraud that officials contend resulted in the underpayment of insurance premiums by more than $160,000.

Suffolk County District Attorney Raymond A. Tierney announced that Joseph Arthurs, of Patchogue, and his company, VGN Enterprise Corp., have been charged with allegedly intentionally misrepresenting his company’s payroll, the number of employees, and the hazards of its work in asbestos removal to his worker’s compensation insurance company.

According to the investigation, in March 2023, Arthurs applied for a workers’ compensation insurance policy from Wesco Insurance Co. for coverage from April 2023 through April 2024, as required by New York law. Arthurs allegedly stated on the application that his company employed a full-time building service contractor as the sole employee with an annual payroll of $50,000.

Based on this application, the insurance company issued a policy for VGN with an annual premium of $4,203.

In September 2024, an investigation by the New York State Inspector General determined that Arthurs had obtained a state asbestos license/certification and filed multiple asbestos project notifications with the state labor department.

The filings allege that the company was engaged in a more hazardous level of asbestos abatement and therefore required workers’ compensation coverage classified for that type of work. The investigation also determined that VGN had employed a multitude of workers during the course of the year, with an annual payroll of $354,112.

As a result of these alleged misrepresentations, VGN significantly underpaid a total of $163,561.00 in insurance premiums on its workers’ compensation insurance policy.

According to Tierney, Arthurs and VGN were arraigned on September 9. Their next court date is September 21.

Topics Fraud New York Workers' Compensation Contractors