Florida Business Owner Arrested for $300K Workers’ Comp Scheme

May 4, 2016

An owner of a construction company in Orlando, Florida. is being charged with workers’ compensation premium fraud and engaging in an organized scheme to defraud, according to a statement from the Florida Department of Financial Services. Chief Financial Officer Jeff Atwater announced the arrest of Oscar Matute, owner of Orlando construction company Matute Express General Construction Inc.

Matute is alleged to have misrepresented information regarding Matute Construction’s employees and payroll when applying for a workers’ compensation policy, DFS said. By doing so, Matute allegedly avoided at least $300,000 in workers’ compensation premium payments.

After discovering significant discrepancies between the amount in payroll checks that were being cashed and the amount of payroll that had been reported on the business’ workers compensation policy, workers’ compensation compliance officers working for DFS began questioning the company’s number of employees and total payroll figures. After failing to comply with multiple requests for financial documents, compliance officers visited two different Matute Construction work sites and workers on both sites confirmed that they were paid by Oscar Matute.

DFS alleges by utilizing multiple money service businesses in Orlando and Jacksonville to cash his company’s payroll checks, Matute was able to conceal hundreds of thousands of dollars in unreported payroll; a common method used to bypass workers’ compensation statutes. By misrepresenting the amount of Matute Construction’s payroll, employees and the businesses operations Matute was able to avoid more than $300,000 in workers’ compensation premium dues.

Workers’ compensation policies are calculated by factoring in a company’s total payroll and number of employees along with the risks associated with the company’s field of work, among other factors. Investigators alleged that Matute lied when obtaining a workers’ compensation insurance policy from Commerce & Industry Insurance Company to cover Matute Express General Construction Inc. He did so by grossly underreporting the company’s payroll. During the dates represented on the policy paperwork, more than $2.7 million in payroll checkers were cashed, far more than the $148,000 that was reported.

Matute was arrested and charged with workers’ compensation premium fraud and engaging in an organized scheme to defraud, both of which are first degree felonies. This case will be prosecuted by the Office of the State Attorney Angela Corey of the Fourth Judicial Circuit and if convicted, Matute faces up to 20 years in prison.

Source: Florida Department of Financial Services

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