Two Milford, Massachusetts business owners have been indicted in connection with failing to accurately report their total payroll and workforce to avoid paying hundreds of thousands of dollars in insurance premiums, Attorney General Maura Healey announced recently.
“Workers compensation insurance fraud places a financial drain on the system, and particularly onto honest policyholders who play by the rules,” said Daniel Johnston, executive director of the Insurance Fraud Bureau. “The Insurance Fraud Bureau will continue to work with AG Healey’s office, and investigate all schemes of this type that defraud the system and circumvent the rules.”
Segundo Nicolas MuyubisnayCungachi (Cungachi), 31, of Milford was charged with workers compensation fraud (5 counts) and Larceny of more than $250 (2 counts). Maria AlegriaMorocho Munoz (Morocho), 29, also of Milford was charged with workers compensation fraud (2 counts) and Larceny of more than $250 (2 counts).
According to authorities, Cungachi and Morocho formed three Milford area roofing companies between 2008 and 2014: Byron Construction in 2008, Nationwide Construction Corporation in 2010, and First Nationwide Construction Corporation in 2012. Each company was allegedly insured for workers comp and were each assigned premiums based on their reporting.
The Workers Compensation Ratings and Inspection Bureau (WCRIB) establishes different categories of policy cost depending on the risk of injury associated with different types of jobs and applies the payroll and size of workforce to premium rates.
Alleged Scheme Led to Lower Premium Rates
Authorities allege that based on their reporting, Cungachi and Morocho were granted lower premium rates on their company policies.
As a result of this alleged scheme, Cungachi and Morocho put the insurance companies unknowingly at risk to cover any undisclosed employees for injuries that occurred or may have occurred during the policy periods and avoided paying more than $615,000 in insurance premiums.
The Insurance Fraud Bureau of Massachusetts (IFB) referred these cases to the Attorney General’s Office after an investigation into reports that the companies were committing insurance fraud.
A Worcester County Grand Jury returned indictments against Cungachi and Morocho;the defendants were to be arraigned in Worcester Superior Court at a later date.
Author Kori Shafer-Stack, Editor, Amaxx Risk Solutions, Inc. is an expert in post-injury response procedures and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. www.reduceyourworkerscomp.com. Contact: kstack@reduceyourworkerscomp.com.
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