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Bar Owner Found Guilty of Workers’ Compensation Fraud

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cannery-row-71836_1920-300x225Salvatore Carbone, age 58, has pleaded no contest to a charge of workers’ compensation insurance fraud. He has been sentenced to 40 days in jail and three years’ probation. The judge suspended the statutory $10,000 penalty; it will remain suspended if he completes his probation satisfactorily.

Carbone operates and owns Sal’s Alley Side Café and Carbone’s Bar, in Monterey, California. Both locations opened in 2007 and are located next to each other on Monterey’s popular Lighthouse Street. In 2017, the Monterey County District Attorney’s Office received information that Carbone had lied to the State Compensation Insurance Fund (SCIF) about the number of people he employed. The Workers’ Compensation Fraud Unit investigated and confirmed that, for the period of August 2014 to August 2015, Carbone had fraudulently claimed he was the sole employee at Carbone’s Bar.

By claiming he had no employees, Carbone was able to pay lower workers’ compensation insurance premiums than he should have paid. Workers’ compensation insurance represents a sizeable overhead for businesses. Faced with competition in the marketplace, it can be hard for companies to turn a profit. An increasing number of businesses have been found to have misclassified their employees or misrepresented the number of employees in order to reduce their workers’ compensation overheads.

With premiums 176 percent higher than the national average until 2016, California was top of the national workers’ compensation insurance rankings, according to a report by the State of Oregon. In 2018, New York overtook California as the most expensive state for workers’ compensation premiums. Nonetheless, premiums still cost employers an average of $2.87 for every $100 of payroll. This is only the average cost—for many employees, such as construction workers, premiums will be considerably higher.

While this kind of fraud may, in the short term, help business owners such as Carbone, in the long term it raises costs for companies which do follow the rules. The Monterey County District Attorney’s office reminded the public that, according to state law, all employers must have workers compensation for all their employees. This ensures there are enough resources to cover medical costs and benefits for employees who are injured on the job.

Investigators at the Workers’ Compensation Fraud Unit examined business records and payroll relating to Carbone’s businesses. In addition, they interviewed Carbone, his accountant, and his employees. The evidence showed Carbone had misrepresented payroll specifically so the SCIF would give him a lower workers’ compensation insurance rate.

In an August post to the Facebook Page for Carbone’s Bar, Carbone wrote about how he felt the city of Monterey was actively trying to close down bars and restaurants through draconian or unreasonable laws. “As you all are aware,” he wrote, “the Bull and Bear is being forced out of business… I am asking for your help in saving them and all the bars and restaurants in Monterey. It is just a matter of time before the city shuts us all down for one reason or another.”

The maximum penalty for misrepresenting payroll to obtain a reduced workers’ compensation premiums is five years in county jail and a fine of double the amount the fraud was worth.

Florida Workers’ Compensation Fraud Defense Attorney

If you are involved in a worker’s compensation fraud investigation, then you should hire a lawyer. Contact us to set up a free initial consultation and work with one of Florida’s most experienced workers’ compensation fraud defense attorneys.

Source

2018-11-15 Owner of Carbone’s Bar in Monterey pleads guilty to insurance fraud

Bar Owner Found Guilty of Workers’ Compensation Fraud

By

cannery-row-71836_1920-300x225Salvatore Carbone, age 58, has pleaded no contest to a charge of workers’ compensation insurance fraud. He has been sentenced to 40 days in jail and three years’ probation. The judge suspended the statutory $10,000 penalty; it will remain suspended if he completes his probation satisfactorily.

Carbone operates and owns Sal’s Alley Side Café and Carbone’s Bar, in Monterey, California. Both locations opened in 2007 and are located next to each other on Monterey’s popular Lighthouse Street. In 2017, the Monterey County District Attorney’s Office received information that Carbone had lied to the State Compensation Insurance Fund (SCIF) about the number of people he employed. The Workers’ Compensation Fraud Unit investigated and confirmed that, for the period of August 2014 to August 2015, Carbone had fraudulently claimed he was the sole employee at Carbone’s Bar.

By claiming he had no employees, Carbone was able to pay lower workers’ compensation insurance premiums than he should have paid. Workers’ compensation insurance represents a sizeable overhead for businesses. Faced with competition in the marketplace, it can be hard for companies to turn a profit. An increasing number of businesses have been found to have misclassified their employees or misrepresented the number of employees in order to reduce their workers’ compensation overheads.

With premiums 176 percent higher than the national average until 2016, California was top of the national workers’ compensation insurance rankings, according to a report by the State of Oregon. In 2018, New York overtook California as the most expensive state for workers’ compensation premiums. Nonetheless, premiums still cost employers an average of $2.87 for every $100 of payroll. This is only the average cost—for many employees, such as construction workers, premiums will be considerably higher.

While this kind of fraud may, in the short term, help business owners such as Carbone, in the long term it raises costs for companies which do follow the rules. The Monterey County District Attorney’s office reminded the public that, according to state law, all employers must have workers compensation for all their employees. This ensures there are enough resources to cover medical costs and benefits for employees who are injured on the job.

Investigators at the Workers’ Compensation Fraud Unit examined business records and payroll relating to Carbone’s businesses. In addition, they interviewed Carbone, his accountant, and his employees. The evidence showed Carbone had misrepresented payroll specifically so the SCIF would give him a lower workers’ compensation insurance rate.

In an August post to the Facebook Page for Carbone’s Bar, Carbone wrote about how he felt the city of Monterey was actively trying to close down bars and restaurants through draconian or unreasonable laws. “As you all are aware,” he wrote, “the Bull and Bear is being forced out of business… I am asking for your help in saving them and all the bars and restaurants in Monterey. It is just a matter of time before the city shuts us all down for one reason or another.”

The maximum penalty for misrepresenting payroll to obtain a reduced workers’ compensation premiums is five years in county jail and a fine of double the amount the fraud was worth.

Florida Workers’ Compensation Fraud Defense Attorney

If you are involved in a worker’s compensation fraud investigation, then you should hire a lawyer. Contact us to set up a free initial consultation and work with one of Florida’s most experienced workers’ compensation fraud defense attorneys.

Source

2018-11-15 Owner of Carbone’s Bar in Monterey pleads guilty to insurance fraud

New York Construction Company Charged With Workers’ Compensation Fraud

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architecture-blue-build-162557-300x194Affinity Human Resources and Parkside Construction of Queens, New York, have been charged with workers’ compensation insurance fraud as well as underpaying workers. A number of employees of both companies, including several executives, have been charged. All have pleaded not guilty.

Parkside Construction has worked on several projects during Manhattan’s current building boom, including Steinway Tower in Midtown and the Marriott Hotel on Pearl Street in the Financial District. The New York County District Attorney’s office alleges that Parkside Construction worked together with Affinity to underreport $42 million in payroll between 2014 and 2017.

In New York State, employers of construction workers are required to have full workers’ compensation coverage. Their insurance premiums are based on the kind of work executed by the employees as well as the level of payroll. By underreporting payroll, Parkside Construction was able to keep its workers’ compensation insurance artificially low. The DA’s office alleges they avoided paying $7.8 million in insurance premiums.

At the same time, Parkside Construction doctored their workers’ timecards. Face-recognition machines were used on worksites to record employees’ shifts. These timecards, however, were routinely changed to show fewer hours worked. One laborer, for example, had approximately $50,000 in wages withheld from him. According to the DA’s office, at least 520 workers were underpaid $1.7 million.

Parkside Construction submitted the doctored timesheets to Affinity Human Resources who then paid some workers with “expense reimbursement” checks in order to avoid insurance contributions and withholding taxes.

“You would think there would be enough money there to fairly compensate the hundreds of workers they hired,” said New York County District Attorney Cyrus Vance Jr. “Instead, Parkside Construction has been charged with systematically altering their workers’ timesheets, lowering their reclaimed wages, and then submitting the falsified timesheets to Affinity Human Resources.”

In 2015, employees attempted to sue Parkside Construction over the issue of withheld wages. The DA’s investigation has been ongoing since 2017.

Francesco Pugliese, co-owner of Parkside Construction denied all charges in a statement released through his attorney. “We have known about this investigation for over a year and look forward to showing the DA’s office and investigators why they are wrong in filing these charges against Parkside and other individuals that were indicted,” he said.

Peter Tilem, attorney for James Lyons, one of Parkside Construction’s supervising foremen, claims his client has been placed in a vulnerable situation because of the company’s behavior. “He’s not a wealthy guy,” said Tilem. “He’s a man who was working for a company that may or may not be corrupt.”

“Construction workers are responsible for some of the most dangerous jobs in the city, and whether they’re working thousands of feel up in the air or 20 feet below ground level, they deserve to be paid fairly and fully for their work,” said Vance.

At a news conference, Vance had a message for the construction industry at large. “We are saying to those in the construction industry as a whole who take advantage of their employees at the expense of the employee’s’ safety that you cannot hide the work that you are doing that defrauds your employees.”

Criminal charges include grand larceny and insurance fraud. In addition, the DA’s office is beginning civil asset forfeiture proceedings to recoup the money owed.

Florida Workers’ Compensation Fraud Defense Attorney

If you are involved in a worker’s compensation fraud investigation, then you should hire a lawyer. Contact us to set up a free initial consultation and work with one of Florida’s most experienced workers’ compensation fraud defense attorneys.

Sources

2018-05-18 Queens Construction Company, Payroll Firm Underpaid Workers

2018-05-16 Queens Construction Firm and Payroll Company Hit With Wage Theft, Insurance Fraud Charges

Significant Reforms to Civil Asset Forfeiture in Philadelphia

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agreement-business-businessmen-886465-300x200In 2014, Philadelphia police seized the home of Chris and Markela Sourovelis after their son was arrested for selling drugs worth $40 outside on their property. The police used a process known as civil asset forfeiture to take the property. This is a legal procedure where law enforcement can take someone’s property or cash if it is suspected of being involved in a crime. They can do so without a criminal conviction or even filing criminal charges.

According to the Institute for Justice (IJ), the use of civil asset forfeiture in Philadelphia has gone “unchecked” for years. Until recently, all funds from civil asset forfeiture seizures went directly Philadelphia’s law enforcement.

Between 2012-17, the District Attorney’s Office and the Philadelphia Police Department spent over $7 million from these funds. More than 18 percent of the DA’s annual budget came from civil forfeitures. There was little oversight on these funds: they were used to pay for submachine guns, a website, and even parking tickets.

When Chris and Markela discovered they were not alone, they joined a class-action lawsuit against the city filed by IJ. The suit claimed that the DA’s Office, the City, and the First Judicial District violated due process during seizures.

On Tuesday, the prosecution and law enforcement came to a consent decree agreement—that is, a resolution where there is no admission of guilt or liability—which announced significant changes to the application of civil asset forfeiture in Philadelphia.

Under the settlement, funds from civil forfeitures will no longer go to the Philadelphia PD. Instead, the money will be given to nonprofits. If an arrest is simply for possession of drugs, police may seize the illegal drugs but no property. Law enforcement will now provide a receipt of seized property; the receipt will also contain instruction on how to get the property back. An individual may soon file for the immediate return of property if it affects his or her livelihood—for example, if the person works as an Uber driver and his or her vehicle is seized. A simplified legal process will be put in place, and the process will now be under the control of judges rather than the prosecutors.

Philadelphia’s District Attorney, Larry Krasner, spoke approvingly of the agreement. “This settlement agreement was a long time coming and something our city needs… We will focus on cases where there is a conviction and, thanks to the settlement, residents now have additional protections and a clear process to retake possession of their property.”

“The settlement is going to make civil forfeiture a lot harder to pursue,” said Darpana Sheth of the IJ. “They have a higher standard of proof. They have to show the property owner knew about or consented to the illegal activity.”

In order for the agreement to go into effect, it needs to be approved by Judge Eduardo Robreno. A $3 million fund will be available for people who had property seized to receive compensation. Individuals not convicted of a crime will receive 100 percent of the value of their property. First-time offenders and low-level offenders will receive 75 percent of the value.

“This is a good resolution because it reforms a system that, left unchecked, can prey upon the most vulnerable. People who, in many instances, have no understanding of their rights and no one to fight for them,” said Mayor Jim Kenney. “In short, this settlement makes Philadelphia a more just city.”

Civil Asset Forfeiture Attorney

If your lawful property has been seized, then you should hire a lawyer. Contact us to set up a free initial consultation and work with one of Florida’s most experienced civil forfeiture defense attorneys.

Sources

2018-09-19 Civil asset forfeiture reform – Don’t Expect Philly DA and Police to Stop Seizing Money Anytime Soon

2018-09-18 Philly Civil Forfeiture Suit Settled, Program Changes Coming

Counter Point: Alabama Officials Appeal to Public to Preserve Civil Asset Forfeiture

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mcveighsutton-1-300x224With all of the controversy revolving around civil asset forfeiture in recent years, support for such policies is hard to find. In fact, any story that mentions the policies is sure to talk about a grave injustice has been done to the victim of the forfeiture.

To be sure, the actual of examples of abuse of civil asset forfeiture laws are plentiful. However, that does not stop proponents of civil asset forfeiture from remaining adamant that the laws are an overall good for society rather than a perpetual evil. An Alabama District Attorney and an Alabama Sheriff are the latest to speak out in defense of civil asset forfeiture, which comes as the Alabama Legislature begins considering legislation that would drastically change the way civil asset forfeitures are handled in Alabama in favor of civilians.

Alabama officials Brian McVeigh and Dave Sutton wrote a combined column in defense of civil asset forfeiture on AL.com, an Alabama news website managed by the Alabama Media Group. McVeigh is the Calhoun County District Attorney and president of the Alabama District Attorneys Association, and Sutton is the Sheriff of Coffee County and president of the Alabama Sheriffs Association, giving their combined column a fair representation of the opinions permeating the upper echelons of Alabama law enforcement.

To start off their article, titled Don’t gut civil asset forfeiture, the pair lays out their reasoning for defending civil asset forfeiture in ways that opponents of the policies have probably heard many times before – that although the changes proposed in legislature are “well-meaning,” they would ultimately “gut what is an effective crime-fighting tool while making it easier for drug dealers and other criminals to hang on to their ill-gotten gains.”

The authors lament that “special interest groups” have established what they say is a “narrative that law enforcement – police, sheriffs and other authorities – are using civil asset forfeiture to unfairly take money and property from innocent Alabamians.” That narrative, they say is false. “Law enforcement uses civil asset forfeiture only to go after criminals, and state law already guarantees a process that is clear and fair for any person to challenge forfeiture in court.”

If that is the case, then the libertarian, civil liberties, and public interest law firm the Institute for Justice is apparently unaware. The Institute for Justice has a grading system for all of the states in the USA, rating Alabama among the “worst in the nation” with a D- grade for its policies. The reasons cited for the grade include:

  • Low bar to forfeit and no conviction required
  • Limited protections for innocent third-party property owners
  • 100% of forfeiture proceeds go to law enforcement

That last point, that 100% of proceeds go to law enforcement, is a common complaint from critics of civil asset forfeiture, but it seems to be one of the main reasons that McVeigh and Sutton want to keep the current policies intact. After all, they say, “What incentive would local police and sheriffs have to invest manpower, resources and time in [drug and stolen property ring] operations if they don’t receive proceeds to cover their costs?”

Civil Asset Forfeiture Attorney

If your lawful property has been seized, then you should hire a lawyer. Contact us to set up a free initial consultation and work with one of Florida’s most experienced civil forfeiture defense attorneys.

Sources:

Don’t gut civil asset forfeiture

Policing for Profit: Alabama