Florida Man Arrested for Running Shell Company Workers’ Comp Scam

June 5, 2017

A Florida man has been arrested for allegedly operating a shell construction company for the sole purposes of selling the company’s workers’ compensation certificate, according to a statement from Chief Financial Officer Jeff Atwater.

Leon “Chuy” Jimenez, owner of Chuy Construction Inc. (Chuy Construction), was arrested recently after a fraud investigation revealed that Jimenez’s construction company was a shell company, which conducts no significant business operations and is used as vehicle to conduct fraudulent financial scams, such a workers’ compensation fraud.

The Department of Financial Services’ Bureau of Insurance Fraud received a tip from the Florida Carpenter’s Union alleging that Jimenez might be engaged in illegal activity and launched an investigation.

Investigators discovered that Jimenez had allegedly provided false information on the company’s workers’ compensation application, claiming that Chuy Construction employed 50 people who performed drywall and other basic construction services across Central Florida. However, between August 2014 and May 2015, investigators tracked more than $2 million in payroll that had been cashed by at least 140 employees.

The Bureau’s investigation later revealed that Chuy Construction was not performing any construction work whatsoever but rather selling its workers’ compensation certificate to other subcontractors in exchange for payment. DFS said in doing so, subcontractors evaded the law and left employees vulnerable to costly medical expenses and lost wages in the event of on-the-job injuries. Also, as a result of the scam, Chuy Construction’s insurance company was defrauded of more than $160,000 between August 2014 and May 2015.

Jimenez was arrested by DIFS investigators May 22, 2017, and later transported to the Orange County Jail. He has been charged with two counts workers’ compensation fraud–failure to secure coverage, false document as proof of coverage, false or misleading statements to diminish/avoid premiums, conceal payroll, application fraud, and scheme to defraud. He has also has been charged with one count grand theft.

This case will be prosecuted by the Orlando Office of the Statewide Prosecutor. If convicted, Jimenez faces up to 30 years in prison.

Source: Florida Department of Financial Services

Was this article valuable?

Here are more articles you may enjoy.