New York, NY – Manhattan District Attorney Alvin L. Bragg, Jr. recently announced the indictment of JUAN ESCOBAR, 46, and his drywall and carpentry companies for defrauding the New York State Insurance Fund (“NYSIF”) of nearly $3 million in insurance premium payments. The defendants are charged in a New York Supreme Court indictment with Conspiracy, Insurance Fraud and Falsifying Business Records.1
“Juan Escobar allegedly defrauded the system and lined his own pockets at the expense of the safety of his workers,” said District Attorney Bragg. “Workers should be afforded every protection possible. I am grateful to the prosecutors in my office for their commitment to protecting the City’s workers.”
According to court documents and statements made on the record in court, from November 18, 2013, to October 29, 2021, ESCOBAR defrauded NYSIF, which provides workers’ compensation and disability benefits for employers in New York State, by significantly underreporting his payroll during annual insurance premium audits. ESCOBAR cashed more than $26 million in checks at locations across Manhattan and Queens during the course of this scheme, using the cash to fund his companies’ unreported payrolls.
ESCOBAR and his companies, INFINITY DRYWALL CORP., INFINITY QUALITY SERVICES INC., JMC DRYWALL CORP. and JJM BUILDERS, INC., fraudulently reported the smaller employee payrolls to the state, grossly reducing the amount of insurance payments ESCOBAR and the companies were required to pay to NYSIF and leaving workers on large construction projects underinsured.
To facilitate the scheme and separate himself from the transactions, ESCOBAR issued cashier’s checks to shell companies in the names of family members, which were then cashed at his direction. The cashier’s checks were made to appear as legitimate payments to subcontractors for construction work. These proceeds were funneled to his off-the-books payroll, which typically totaled more than $50,000 a week.
ESCOBAR gave employees cash in envelopes near a 7 train stop in Sunnyside, Queens.
ESCOBAR hid the missing workers from the reported payroll using multiple tactics. He directed injured workers to falsely claim workplace injuries occurred elsewhere, told them to avoid detection from site safety inspectors or gave workers cash in exchange for failing to file workers’ compensation claims. ESCOBAR also failed to report the worker injuries to NYSIF. When a workers’ compensation claim did get filed, he would misrepresent the worker’s employment status.
The investigation began when Rackets and financial investigators from the Manhattan District Attorney’s Office identified extensive and suspicious financial transactions being conducted and directed by ESCOBAR and his drywall and carpentry companies.
Assistant D.A.s James J. Hanley and Zachary Weintraub are handling the prosecution of this case under the supervision of Assistant D.A.s Mike Ohm (Deputy Chief of the Rackets Bureau), Judy Salwen (Principal Deputy Chief of the Rackets Bureau), Jodie Kane (Chief of the Rackets Bureau), Christopher Conroy (Senior Advisor to the Investigation Division) and Executive Assistant D.A. Susan Hoffinger (Chief of the Investigation Division). Assistant District Attorney Jaime Hickey-Mendoza also assisted with the prosecution.
The investigation was led by Rackets Investigator Amanda Bauza and her team, under the supervision of Walter Alexander (Chief Investigator), Michael Wigdor (Assistant Chief Racket Investigator), and Sgt. Daniel Clark-El. Investigative Analyst Philetus Holt and Trial Preparation Assistants Yanisa Campusano, Samantha Kritzer, and Eleanor Bock assisted with the investigation. Investigative support also came from the High Technology Analysis Unit (Director Steven Moran, Supervising Computer Forensic Analyst Doug Daus, and Cyber Response Investigator Lauretta Gorman) and Forensic Accounting & Financial Investigations Bureau (Senior Financial Investigator Nicholas Cangro and Forensic Accountant Investigator Edward Keegan). The Spanish Language Unit also provided support. Former Trial Preparation Assistant Nicholas Quinn and former Principal Financial Investigator Robert Ryan also assisted with the case.
D.A. Bragg thanked the New York State Insurance Fund, in particular, Director of Investigations Jessica Silver, Investigative Officer Dominick Raspante and Auditor Granville Mo, as well as the New York State Department of Labor and the New York City Department of Investigation for their assistance in the investigation.
1The charges contained in the indictment are merely allegations and the defendants are presumed innocent unless and until proven guilty. All factual recitations are derived from documents filed in court and statements made on the record in court.
Source: Manhattan DA’s Office