Palm Beach, FL – Chief Financial Officer Jimmy Patronis recently announced the recent arrest of Juan Jose Castro, owner of JACM Construction Corp., after his alleged attempt to operate a shell company with the sole intent of circumventing the state’s workers’ compensation laws. A “shell company” is an entity that conducts no significant business operations and can be used as vehicle to conduct fraudulent financial transactions, such as workers’ compensation fraud.
Castro obtained a workers’ compensation policy for JACM Construction Corp. April 25, 2017. When obtaining the policy, Castro provided his business operated with an estimated annual payroll of $112,000.00 for work classified under the description of wallboard installation and carpentry.
The Department of Financial Services’ Bureau of Workers’ Comp Fraud along with the Broward Sheriff’s Office (BSO) was conducting a surveillance operation at a Vero Beach money service business (MSB) when a suspicious transaction for JACM Construction Corp. was identified. The transaction involved Castro, the president and sole registered agent of JACM, cashing 27 business to business checks totaling $127,025.37. This single transaction surpassed Castro’s estimated yearly payroll.
Through further investigation, it was found that from February 12, 2016 to August 6, 2017, Castro cashed more than $8.4 million in payroll at various MSBs in Florida.
Had Castro accurately provided the amount of payroll that would be transmitted by his company, Castro’s yearly premium would have been $424,314.00. As a result of his actions, Castro defrauded his insurance company by avoiding nearly $300,000 in premium payments.
Castro was arrested August 11, 2017 in Palm Beach County by the Bureau of Workers’ Comp Fraud in conjunction with the BSO Money Laundering Task Force and BSO Workers’ Compensation Fraud Task Force. He has been charged with workers’ compensation premium fraud, a first-degree felony, and is being held with a $100,000 bond.
This case will be prosecuted by the Miami-Dade State Attorney’s Office, 11th judicial circuit. If convicted, Castro could face up to 10 years in prison.
Source: FL CFO’s Office