Failure to Pay Workers Compensation Premiums

A New York asbestos  contractor failed to pay  $1.6 Million  in workers’ compensation premiums and will serve four years in prison.  Upon his release he will be deported to his home country as he is an illegal immigrant.

To complicate the  issue the employer used a number of “schemes” lasting over ten years, to avoid detection and premium payments.

1. He claimed  to have only one employee – an office worker.  Using this false data insurance companies charged far lower rates than if the true number (dozens) of his employees and the hazardous nature of their work was known.
2. He repeatedly  changed the name of his company.
3. He classified  his asbestos-removal workers as independent contractors.  Visit to review IC rules.
4. He filed  a report stating he had NO workers!,  triggering an immediate investigation!

In addition  to the prison sentence, restitution for unpaid premiums to three separate carriers was negotiated in a plea agreement.  The amounts are: $1,067,265 to the New York State Insurance Fund, $345,904 and $238,187 to private insurance companies.

According to  William Gurin, inspector general for the New York State Workers’ Compensation Board,
the amount of employer-premium fraud in this case exceeded the amount from all such cases brought last year by the Workers’ Compensation Board.  Premium fraud in the construction industry is very high because dangerous jobs equals high workers’ compensation premiums. (workersxzcompxzkit)

The NYCSWCB  is changing the focus of investigations to focus more on health care provider fraud and employer premium fraud to make it clear the law is being enforced Mr. Gurin said.

Extracted from:  New York Times by Steve Greenhouse, 7/28/2009

This blog originally appeared on the LexisNexis Workers’ Compensation Law Center.

Reposted with Permission Visit LexisNexis for more information and full reports.

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All state laws vary.

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