Austin, TX – Texas Mutual Insurance Company recently reported that Alpha Mar doing business as Industrial Machine Works pleaded guilty to a first-degree felony on workers’ compensation fraud-related charges.
A Travis County district court ordered the company to pay $250,000 in restitution to Texas Mutual.
The Texas Department of Insurance, Division of Workers’ Compensation prosecutor in Travis County obtained the conviction.
Alpha Mar, a vessel repair and marine service business located in Houston, obtained workers’ compensation coverage through Texas Mutual. From 2008 to 2012, owner John Stergiou made misrepresentations to Texas Mutual regarding the payroll and operations of Alpha Mar and other related companies.
Because workers’ compensation insurance premium is based, in part, on payroll, this type of scheme results in an employer being charged a lower premium than it actually owes. By hiding payroll, an employer can gain an unfair advantage over honest competitors.
Source: Texas Mutual