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Bob Coleman of Georgia Facing Additional Workers’ Compensation Fraud Charges

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coins-948603_1920-300x200A Georgia man arrested earlier this year on charges of workers compensation insurance fraud now faces six additional counts of insurance fraud and violating state insurance reporting laws.

In January, Bob Coleman, age 69, a county commissioner for Glynn County, Georgia, was arrested together with his wife Sherry, age 59, after a yearlong investigation into their business practices. The couple together ran Coleman Insurance, and Bob Coleman was a respected member of the community. He was elected to the Glynn County Commission three times, and the couple has lived in the area for their whole lives.

Investigators from the State Board of Workers’ Compensation Enforcement Division alleges that the couple defrauded customers of Coleman Insurance over several years. According to the charges, they would sell workers’ compensation insurance packages to clients and keep the money for themselves while issuing fake certificates of coverage.

“My wife Sherry and I were born in Brunswick, Georgia,” said Coleman in a press release. “We have lived our entire lives in this community, where I have been a licensed insurance agent for over 45 years. During those 45 years, there has never been a hint of impropriety, much less an actual allegation.”

The original 15 felony counts included six counts of insurance fraud for events that took place from 2016 through 2018. According to a press release issued at the time, “The Colemans have been charged with defrauding customers who paid the pair for workers’ compensation insurance as well as other lines of insurance. The indictment handed down includes ten separate victims.”

At the time, Doug Williams, an investigator at the State Board of Workers’ Compensation declined to comment on the case except to say that the investigation had not been closed and that further victims may surface.

The new charges related to two new alleged victims: William Daniel Wilson and Robert Gary Jr. Two of the new charges are felony counts of insurance fraud. According to the indictment, Bob Coleman “did knowingly receive money for the purpose of purchasing [workers’ compensation] insurance and did convert said money to the accused’s own benefit.” The other four counts relate to Coleman’s failure to refund money for premiums paid by Wilson and Gary.

Unlike the earlier charges which were leveled at both Bob and Sherry Coleman, these latest charges relate only to Bob’s activities.

The day after the new charges were handed down, Bob Coleman released a press statement which protested his innocence. He denies all allegations and said he intended to continue to serve his term as county commissioner.

“My wife Sherry and I are innocent of the charges that have been made against us,” he wrote. “We intend to prove our innocence in the courts of Glynn County. Nothing is more important to us than our good name and reputation.”

Coleman said that in his time as an insurance agent, he had not been accused of any wrongdoing. “The presumption of innocence dates all the way back to the ancient Babylonian Code of Hammurabi,” he wrote, “and was bolstered by the Greek statesman Demosthenes who wrote about the importance of not calling people criminals before they were convicted.”

“I don’t know who’s out there to get me, but somebody is,” said Coleman when asked for comment. “That’s about all I can say.”

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

2019-06-27 Commissioner Coleman Denies Insurance Fraud Allegations

2019-06-26 Grand Jury Indicts Commissioner Coleman on Six More Insurance Charges, Including Fraud

Florida Business Owner Mac Johnson Sentenced for Workers’ Compensation Fraud

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roofers-2891664_1920-300x200A business owner in Newberry, Florida has been sentenced to one year and one day in prison for his part in a tax fraud scheme which also involved avoiding paying workers’ compensation insurance as well as harboring immigrants who were in the country without permission.

Mac Johnson, age 51, is owner of three companies—Mac Johnson Roofing Inc., Mac Johnson and Sons Dumpster and Crane, and Johnson and Sons Tree Service. The Florida Department of Financial Services—Workers’ Compensation Compliance Division made several visits to the work sites of Johnson’s companies. Investigators learned that, apart from the foreman, Johnson’s employees neither spoke English nor did they have any personal identification on them.

Investigators compared the names of the employees with the names Johnson had included on his workers’ compensation insurance policy. The names did not match. As a result, Johnson was issued with a “stop work” order. The following day, Johnson provided agents with an insurance policy which had the correct names of the employees on them. This policy, however, was for a landscaper and did not provide coverage for the roofers in Johnson’s employ.

After partnering with Homeland Security Investigations, investigators reviewed Johnson’s bank and payroll records. The investigation showed that Johnson had reported about a dozen of his employees correctly—paying the appropriate payroll tax and other withholdings. Johnson, however, employed an additional 30 to 40 people who he did not report to either the State of Florida or the IRS. These individuals, he paid under the table.

Between 2012 and 2016, Johnson made unreported payments to these employees amounting to $6.9 million. In doing this, he avoided paying $1.7 million in taxes and over $1 million in workers’ compensation insurance premiums. Johnson attempted to avoid detection by paying his employees in cash or by using checks amounting to less than $10,000 to avoid legal reporting requirements.

The investigation also showed that Johnson kept falsified I-9s in his companies’ files. Although allegedly signed by the employees, the I-9s had all been filled out in the same handwriting. Writing samples from the employees did not match the handwriting on the I-9s. The employees confirmed that they had never filled out the I-9s. They also all acknowledged that they were in the United States without permission.

Johnson housed these employees in buildings he owned and provided transportation to and from the work sites. Johnson deducted money for rent and transportation from the employee’s pay.

On February 27, Johnson pled guilty to the charges against him. He faced up to 45 years in prison. For the charge of Wire fraud, he faced up to 20 years in federal prison. For the charge ow Willful Failure to Pay Over Tax, he faced five years. For the charges of Unlawfully Transporting Aliens and for Structuring Financial Transactions, he faced up to ten years each.

On March 26, Johnson was sentenced to one year and one day in prison.

“I commend the vigilance of our federal and state investigative partners and prosecutors in this case for upholding the laws governing American taxes and employment,” said Lawrence Keefe, United States Attorney for the Northern District of Florida. “Honest individuals and businesses are harmed by these lawbreakers.”

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

2019-03-26 Alachua County Man Sentenced to Prison for Harboring Undocumented Aliens and Evading Workers’ Compensation and Payroll Taxes

2029-02-28 Alachua County Man Pleads Guilty to Harboring Undocumented Aliens and Evading Workers’ Compensation and Payroll Taxes

Florida Business Owner Mac Johnson Sentenced for Workers’ Compensation Fraud

By

roofers-2891664_1920-300x200A business owner in Newberry, Florida has been sentenced to one year and one day in prison for his part in a tax fraud scheme which also involved avoiding paying workers’ compensation insurance as well as harboring immigrants who were in the country without permission.

Mac Johnson, age 51, is owner of three companies—Mac Johnson Roofing Inc., Mac Johnson and Sons Dumpster and Crane, and Johnson and Sons Tree Service. The Florida Department of Financial Services—Workers’ Compensation Compliance Division made several visits to the work sites of Johnson’s companies. Investigators learned that, apart from the foreman, Johnson’s employees neither spoke English nor did they have any personal identification on them.

Investigators compared the names of the employees with the names Johnson had included on his workers’ compensation insurance policy. The names did not match. As a result, Johnson was issued with a “stop work” order. The following day, Johnson provided agents with an insurance policy which had the correct names of the employees on them. This policy, however, was for a landscaper and did not provide coverage for the roofers in Johnson’s employ.

After partnering with Homeland Security Investigations, investigators reviewed Johnson’s bank and payroll records. The investigation showed that Johnson had reported about a dozen of his employees correctly—paying the appropriate payroll tax and other withholdings. Johnson, however, employed an additional 30 to 40 people who he did not report to either the State of Florida or the IRS. These individuals, he paid under the table.

Between 2012 and 2016, Johnson made unreported payments to these employees amounting to $6.9 million. In doing this, he avoided paying $1.7 million in taxes and over $1 million in workers’ compensation insurance premiums. Johnson attempted to avoid detection by paying his employees in cash or by using checks amounting to less than $10,000 to avoid legal reporting requirements.

The investigation also showed that Johnson kept falsified I-9s in his companies’ files. Although allegedly signed by the employees, the I-9s had all been filled out in the same handwriting. Writing samples from the employees did not match the handwriting on the I-9s. The employees confirmed that they had never filled out the I-9s. They also all acknowledged that they were in the United States without permission.

Johnson housed these employees in buildings he owned and provided transportation to and from the work sites. Johnson deducted money for rent and transportation from the employee’s pay.

On February 27, Johnson pled guilty to the charges against him. He faced up to 45 years in prison. For the charge of Wire fraud, he faced up to 20 years in federal prison. For the charge ow Willful Failure to Pay Over Tax, he faced five years. For the charges of Unlawfully Transporting Aliens and for Structuring Financial Transactions, he faced up to ten years each.

On March 26, Johnson was sentenced to one year and one day in prison.

“I commend the vigilance of our federal and state investigative partners and prosecutors in this case for upholding the laws governing American taxes and employment,” said Lawrence Keefe, United States Attorney for the Northern District of Florida. “Honest individuals and businesses are harmed by these lawbreakers.”

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

2019-03-26 Alachua County Man Sentenced to Prison for Harboring Undocumented Aliens and Evading Workers’ Compensation and Payroll Taxes

2029-02-28 Alachua County Man Pleads Guilty to Harboring Undocumented Aliens and Evading Workers’ Compensation and Payroll Taxes

California Contractors Without Workers’ Compensation Coverage Facing Charges

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construction-worker-569149_1920-300x200Nine people in Bakersfield in central California are facing charges for attempting to take on contracting work without workers’ compensation insurance coverage.

In April, the California Contractors State License Board (CSLB) led a sting operation designed to catch contractors working without a license or carrying workers compensation insurance. Agents pretended to own a home in the Liberty Park area of the city. They invited contractors to bid on various improvement projects in the house. The bids ranged from $950 to $4,200.

Agents allegedly discovered that nine of the people who put in bids had no workers’ compensation insurance coverage for their workers. As is the case with most states, in California all employers are required to carry workers’ compensation insurance coverage. Coverage provides benefits including disability benefits, medical care, a return-to-work supplement, and even death benefits.

The cost of workers compensation insurance varies dramatically depending on the industry. Effective January 1, 2019, the rate for an office employee ranges from $0.28 to $0.99 per $100 of payroll. For painting contractors, the range is from $8.83 up to $38.66. The most expensive rates are those for roofing contractors, which begin at $23.06 but go all the way up to $87.83. Businesses tend to pay the higher rates if they are newer or if they have had several claims made against them.

I have reported on cases from across the country where companies have attempted to avoid paying the correct rate of workers’ compensation insurance in order to keep their overheads down. Jose Sanchez, a contractor in upstate New York fraudulently claimed his business had no employees. An investigation by the Office of the Inspector General revealed that Sanchez, in fact, had several employees. After working on a project in the city of Amsterdam, Sanchez was arrested and is now awaiting trial.

In Massachusetts, meanwhile, Anner Valentin Amaya underreported the wages he paid and also the number of people he employed in order to pay a reduced rate of workers’ compensation insurance. Amaya was charged with 12 felony counts including five of Workers’ Compensation Fraud.

The nine suspects from Bakersfield have been cited and, according to CSLB, may face the misdemeanor charge of contracting without a license. If convicted, first-time offenders face up to $5,000 in fines and six months in jail. One of the suspects, Jeffrey S. Anderson, faces an additional charge—the felony charge of using a contractor license number illegally. His license expired seven years ago. Anderson faces a year in jail and a $10,000 fine.

It is illegal in California for an individual who is not licensed to carry out contracting work on a project which comes to more than $500—a total which includes both materials and labor. During the CSLB operation, agents discovered 18 individuals who allegedly placed bids over this total.

This is not the first time in the recent past the CSLB Statewide Investigative Fraud Team (SWIFT) have carried out a sting operation in California. In September 2018, 14 individuals were caught in an operation in Bakersfield while another 15 were netted during a sting in Lompoc near Santa Barbara. In February 2018, a further 15 people were caught, also in Bakersfield.

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

2019-04-18 Nine Contractors Caught Without Workers’ Comp Insurance in Undercover Sting

2018-09-27 Sting Operation Leads to Unlicensed Contractors Facing Charges

2018-02-18 15 Unlicensed Contractors Cited in Undercover Bakersfield Sting

Construction Company Owner Charged with Workers’ Compensation Fraud

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boston-3690818_1920-300x200A construction company owner in Massachusetts has been indicted for allegedly concealing payroll in order to reduce his workers’ compensation insurance premiums by tens of thousands of dollars.

Anner Valentin Amaya, age 45, of Revere, a city north of Boston, is the owner of Valetin’s General Contractors Inc. which also does business as Valentin’s Home Improvement. His company has worked on home renovations in the Boston and Cape Cod areas. The Insurance Fraud Bureau of Massachusetts began looking into Amaya’s business practices before referring the investigation to the state Attorney General’s Office.

Charges against Amaya allege that, when his business was audited by the company which provided his workers’ compensation insurance, he underreported both the number of people he employed and also the amount he paid them. By concealing his payroll in this manner, the charges allege, Amaya was able to pay workers’ compensation insurance premiums far below the correct rate.

Workers’ compensation insurance can be a costly overhead for businesses. In Massachusetts, as of January 2018, the average cost of workers’ compensation insurance is $1.37 for every $100 of payroll. While this is below the national average—and less than half of New York’s average rate of $3.08 which is the highest in the country—it nonetheless represents an expense businesses in competitive fields may find it hard to afford. For high-risk industries such as construction, the cost of insurance can be dramatically higher.

I have reported on other cases where businesses have attempted to hide their payroll in order to reduce workers’ compensation expenses. In California, for example, Salvatore Carbone was found guilty last year of workers’ compensation fraud. Between August 2014 and August 2015, Carbone falsely claimed he was the sole employee of the bar he owned, Carbone’s Bar. Carbone was sentenced to 40 days in jail and also three years’ probation. Meanwhile, in Florida, Vanessa Arreguin was charged with three felony counts of concealing payroll while allegedly avoiding paying more than $50,000 in workers’ compensation insurance premiums.

By reducing the cost of doing business, companies that attempt to avoid paying workers’ compensation insurance are able to give themselves an unfair advantage in the marketplace: they can undercut the prices of businesses that play by the rules.

“Worker’s compensation fraud puts employees at risk and drives up insurance rates for honest businesses,” said Jimmy Patronis, Florida’s CFO. Commenting on Arreguin’s case and the broader situation in Florida, he said: “Last year alone, our fraud detectives made more than 400 arrests for workers’ compensation fraud.”

The Attorney General’s Office’s investigation alleges that between May 2012 and August 2016, Amaya avoided paying over $73,000 in workers’ compensation insurance dues. The Suffolk County Grand Jury charged Amaya with five counts of Larceny over $250 by False Pretenses, five counts of Workers’ Compensation Fraud, and two counts of Failure to Provide Workers’ Compensation Insurance.

Assistant Attorney General Kristy Lavigne is prosecuting the case with help from Philip Mantyla, a senior investigator at the Insurance and Unemployment Fraud Unit. Investigators with the Insurance Fraud Bureau are also assisting.

Amaya will be arraigned on April 17 at Suffolk Superior Court in Boston.

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

2019-03-20 Revere Man Charged in Connection with Workers’ Compensation Fraud Scheme