Generally, when you provide an annual payroll estimate to the government you want to make sure it is as accurate as possible. You wouldn’t want your estimate, for instance, to massively underreport payroll by more than one million dollars. That’s generally one of the fastest ways to get nailed for workers’ compensation fraud. Yet, that is exactly what happened in the case of this Miami roofing company.
When originally asked for an annual payroll estimate, the two owners of the company reported an annual estimate of $60,000 on their application for workers’ compensation coverage. Based on this estimate, their premium was set at $14,051. However, investigators were quickly able to identify a total of $288,263 in cashed payroll checks during the company’s policy period. And, that was just the tip of the iceberg as it turns out. (That’s right, the company underreported their income by even more than the already ludicrous figure of almost 5-to-1.)
After further investigation, the Miami-based company was found to have received at least $1,248,416 for their labor costs – a difference of $1,188,416! (You know how it goes, carry a zero here, move the one there – honest mistake, Your Honor.) This would have adjusted their premium from $14,051 to $278,209, meaning they were trying to pocket over $264,158 in premium costs. All told, the company had initially reported only 1/20th of their actual payroll.
Both men involved were arrested in January 2018, and have been charged with workers’ compensation fraud, grand theft and organized scheme to defraud. If convicted, the two men could face up to as many as 60 years in prison. (They probably should have just coughed up the extra quarter million instead of potentially spending most of their lives in prison.)
Today’s “Fraud of the Day” is based on an article entitled, “Miami Roofing Company Owners Arrested in $1 Million Workers’ Comp Scam,” posted on ClaimsJournal.com on February 16, 2018.
Jose Esmelin Martinez and Uzziel Isaias Jaramillo, owners of Esmelin Corporation aka as Esmelin Roofing Contractor (ERC), were recently arrested, according to an announcement by Chief Financial Officer Jimmy Patronis.
Martinez and Jaramillo allegedly concealed nearly $1.2 million in payroll on their workers’ compensation policy renewal application in an alleged attempt to illegally lower their premium costs.
