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Maria Cristina Romero Zelaya, the owner of MiochosisConstruction, Inc., has been arrested in Florida for allegedlyproviding fictitious information when applying for workers’compensation insurance coverage to obtain a lower premium.

Related: Workers' Comp 101

As a result, prosecutors said, Zelaya illegally avoided payingmore than $700,000 in premium payments and left her employeesuninsured and vulnerable to workplace injuries.

“When companies lie to obtain cheaper, inadequate workers’compensation policies, staff or property owners are left vulnerableto covering sky-high medical costs if a worker gets injured on thejob, and free markets are disrupted by scammers who can underbidtheir legitimate competitors,” said Florida’s chief financialofficer, Jimmy Patronis.

Prosecutors received a tip

Prosecutors said in a statement that, after receiving a tip thatZelaya may have falsified information from August 2, 2016 to August2, 2017, investigators from the Florida Departmentof Financial Services (“DFS”) determined that Zelaya had cashedhundreds of payroll checks through local money service businessestotaling more than $5 million.

The checks were found to be for various types of constructionwork that she withheld from her insurance company and were notcovered by her workers’ compensation insurance policy, prosecutorsalleged.

Withheld company’s true annual payroll & workdescription

According to the government, Zelaya reported to her insuranceunderwriter that her company’s annual payroll was $200,000 and hercompany provided plastering and stucco services only. Based on thisinformation, her workers’ compensation premium was $26,622.

Had Zelaya not withheld her company’s true annual payroll andwork description, the amount of her premium would have been$733,549, the government asserted.

Related: How construction cons steal workers' comp premiums:It's a shell game

Steven A. Meyerowitz, Esq., ([email protected])is the director of FC&S Legal, the editor-in-chief of theInsurance Coverage Law Report, and the founder and president ofMeyerowitz Communications Inc. This story is reprinted withpermission from FC&S Legal, the industry’s only comprehensivedigital resource designed for insurance coveragelaw.