On Nov. 3, Florida’s Chief Financial officer Jimmy Patronis and the Department of Financial Services (DFS) announced the recent arrest of Carlos Contreras, owner of DJC Builders & Construction.
According to DFS, Contreras allegedly obtained a fraudulent workers’ compensation policy by underreporting the company’s number of employees, annual payroll amount and scope of work. The allegedly false information let to Contreras avoiding payments of more than $1 million in premiums for an adequate workers’ comp policy.
“When companies lie to obtain cheaper, inadequate workers’ compensation policies, staff or property owners are left vulnerable to covering sky-high medical costs if a worker gets injured on the job, and free markets are disrupted by scammers who can underbid their legitimate competitors,” Patronis said. “It’s a lose-lose situation for Florida and I won’t stand for it.”
According to the statement released by DFS, Contreras claimed his company’s annual payroll was $273,786. For this payroll amount, Contreras was quoted an annual premium of $25,311 for a workers’ compensation policy. But DFS investigators found that between January and August 2017, Contreras cashed at least 620 payroll checks for DJC Builders & Construction. Using various money service businesses across the state of Florida, DFS said, nearly $6.5 million in payroll checks was cashed for the company.
If Contreras had accurately reported the number of employees, total payroll and correct work description, the company’s workers’ comp premium would have amounted to $1,217,161. As a result of Contreras’ alleged actions, the workers’ comp carrier was defrauded of more than $1 million.
Contreras was arrested on Oct. 19 and charged with one count of knowingly concealing payroll and one count of scheme to defraud. The Duval County State Attorney’s office is prosecuting the case. If convicted, Contreras could face up to 60 years in prison.