August 3, 2023
By underreporting payroll, the construction business shortchanged its workers’ comp carrier by more than $790K in premium payments.
The owner of a Miami-area construction company was arrested for workers’ compensation premium fraud, application fraud and “organized scheme to defraud” for allegedly underreporting payroll to avoid having to pay a higher premium, according to the Florida Department of Financial Services.
In 2018, Hector Gutierrez-Morales, owner of HG & AKE Construction Corp., took out a workers’ comp policy with Traveler Property Casualty of America based on an estimated payroll of $161,000. Based on that information, a policy was issued with an estimated annual premium of around $28,000, according to the financial services department.
“When bad actors scheme to avoid required workers’ compensation coverage, they put their employees and customers in danger,” Florida Chief Financial Officer Jimmy Patronis said in a release. “Fraud like this also drives-up insurance rates for honest contractors in our state that choose to play by the rules.”
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