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Businesses that bid on government contracts want the attention of the agencies choosing to award them, but that doesn’t mean they aspire to demand the kind of focus that can result in a criminal investigation. The Columbus Dispatch tells the story of an excavating company whose owner got more attention than he bargained for when he submitted a proposal for work to be performed in an Ohio city.

The story states that when this criminal contractor entered bids with the city of Lancaster, Ohio, he reported that his company had no employees and no payroll. Further research into this case showed that the city of Lancaster raised questions about the bid because they were wary of awarding a contract to a firm that failed to contribute to the Ohio Bureau of Workers’ Compensation. (Businesses in Ohio are required to maintain workers’ compensation coverage. Somehow, this criminal excavator thought that by failing to pay the BWC, he had a winning strategy.)

A tip to the state workers’ compensation bureau prompted an investigation and the subsequent discovery of the contractor’s attempts to defraud the agency. It turns out that three additional false certificates in previous bid packets were discovered. The man initially denied having any knowledge of them, but later admitted to creating and submitting them. (In an interview, he reportedly admitted to always having employees, then later reneged saying he hired subcontractors. Maybe he was confused about which answer would get him out of the hole he had dug for himself.) The investigation eventually determined that the company owner under reported his payroll because he didn’t want to pay the workers’ compensation insurance premiums.

The contractor pleaded guilty to a felony count of workers’ compensation fraud and was sentenced to six months in prison. He was also ordered to repay $5,404 in restitution to the Ohio Bureau of Workers’ Compensation.

The story notes that this fraudster’s six-month prison sentence was suspended for three years of community control, which is essentially jail at home. (Instead of excavating for the city of Lancaster, it looks like this fraudster’s business may be bulldozed.)

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Excavator pleads guilty to workers’ comp fraud,” written by staff and published by The Columbus Dispatch on November 25, 2015.

COLUMBUS — The owner of a Fairfield County excavating company has admitted to falsifying documents about his workers’ compensation coverage when he submitted bid proposals to the city of Lancaster.

William Newell of Pleasantville pleaded guilty to workers’ compensation fraud last week in Fairfield County Common Pleas Court and has been ordered to pay $5,404 to the Ohio Bureau of Workers’ Compensation.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.