Seven Florida residents have been charged with under-reporting payroll by $40 million in order to avoid workers’ compensation premiums, along with money laundering and other alleged violations, state officials said Monday.
Between August 2018 and October 2021, the suspects used shell companies and money laundering to avoid paying more than $7 million in insurance premiums, Florida’s Department of Financial Services reported in a news release. More than $218,000 in cash was seized from the individuals.
“This elaborate scheme illustrates how far criminals are willing to go to avoid paying workers’ compensation premiums,” Florida CFO Jimmy Patronis said. “Workers’ comp fraud creates a vulnerable situation for employees and leaves honest Florida businesses to foot the bill for higher insurance rates.”
DFS worked with the U.S. Department of Homeland Security and the state attorney general’s office in the arrests. The news release did not explain exactly how the alleged scheme worked, how it was uncovered, what type of business was involved, what role the arrested individuals played in the business, or where the company was operating.
The operation may be similar to others around the country that federal and state authorities have cracked down on in recent months. In South Carolina in October, 12 owners and managers of a construction firm were arrested after an undercover investigation showed they were paying workers in cash and avoiding taxes and insurance. The check-cashing company also provided fake certificates, purporting to show that the construction firm had obtained workers’ comp insurance.
Topics Workers' Compensation
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