December 16, 2017

FL Business Owner Arrested for $700,000 Workers’ Compensation Fraud Scheme

Naples, FL – Florida Chief Financial Officer Jeff Atwater recently announced the recent arrest of Raimundo Hernandez-Argueta, owner of Naples construction company Complete Framing Professionals (CFP). Following a joint investigation by the Department of Financial Services’ (DFS) Division of Insurance Fraud and Division of Workers’ Compensation, Hernandez was arrested on fraud charges for allegedly misrepresenting information regarding CFP’s employee operations and payroll when applying for a workers’ compensation policy. By doing so, Hernandez avoided at least $700,000 in workers’ compensation premium payments. Workers’ compensation policies protect employees in the event of an on-the-job injury and if proper policies are not in place, injured employees could be faced with lost wages and costly medical expenses to cover.

Investigators with the Department’s Division of Workers’ Compensation began investigating Hernandez in August 2013 when visits to CFP job sites led investigators to believe that Hernandez was concealing his company’s payroll amount in violation of Florida law. Investigators later discovered that Hernandez obtained a policy through Florida United Business Association providing coverage for four employees, each with an annual wage of $50,000. Hernandez paid $26,910 for this one-year policy. However, job site inspections documented 108 employees during that time frame and more than $5.5 million in total earnings, grossly lower than what was reported to the company’s insurance carrier.

Workers’ compensation policies are calculated by factoring in a company’s total payroll and number of employees along with the risks associated with the company’s field of work.

Based on CFP’s actual payroll of $5.5 million, Hernandez should have paid a premium of $728,057. As a result of his misrepresentations, Hernandez was able to illegally avoid paying more than $700,000 in workers’ compensation premium dues.

Hernandez was arrested without incident by the Collier County Sheriff’s Office and charged with workers’ compensation premium fraud, a first degree felony. He was transported to the Collier County Jail where he later posted a bond of $30,000.

This case will be prosecuted by the Office of Assistant State Attorney Erik Leontiev of the 20th Judicial Circuit and if convicted, Hernandez faces up to 15 years in prison.

Source: FL DFS

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