Workers Comp Fraud Ring Busted, Millions of Dollars Seized

Investigators in Florida recently reported that they brought down a workers compensation fraud ring in Broward County.

According to officials with the state’s division of insurance fraud and Broward County deputies, the investigation known as “Operation Dirty Money” led to the seizing of a million dollars.

In all, eight individuals are facing charges of workers comp fraud and money laundering. They’re accused of being involved in a check cashing scheme to avoid the cost of workers comp coverage.

“Workers compensation premiums are based on the number of employees you report and your amount of payroll. What these folks do is they intentionally go out and set up a company that is just on paper and insure it for the smallest workers comp they’re able to obtain,” Major Geoffrey Branch of the Florida Division of Insurance Fraud remarked.

In this matter, investigators say the fraud involved a construction company. According to investigators, Hugo Rodriguez was the ringleader and allegedly funneled more than $70 million through shell companies to avoid paying workers comp coverage. In court, his bond was set at more than half a million dollars.

Florida Chief Financial Officer Jeff Atwater noted that this kind of fraud takes a billion dollars a year out of Florida’s economy.

The Workers Compensation Fraud Task Force is a joint venture involving the state and Broward County aimed at stopping workers comp fraud.

Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: [email protected].

WORKERS COMP MANAGEMENT MANUAL: www.WCManual.com

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers’ comp issues.