Workers' Comp Fraud Ring Shut Down

Chief Financial Officer Alex Sink and U.S. Attorney James R. Klindt have announced that five individuals have been indicted on charges of workers' compensation fraud. In a 25-count indictment, the five suspects stand accused of collecting over $100 million in premiums while leaving thousands of unsuspecting employers and workers unprotected in the event of an on-the-job injury. From its origins in Florida, the fraud ring was monitored and resulted in arrests in other parts of the country. The five individuals arrested include: Jerry Brewer of Capistroane Beach, California; Donald Touchet from El Cajon, California; Dr. Richard Standrige of Tempe, Arizona; Robert Jennings of Danville, Illinois; and Joshua Poole of Atlanta.

The investigation into the fraud scheme started in 2002 after the Division of Workers' Compensation issued a stop-work order against the Jacksonville-based MiraLink Group, Inc. for failure to secure workers' compensation insurance. MiraLink was a leasing company that at one time employed over 20,000 employees before closing its doors as a result of their ongoing legal troubles. As the investigation unfolded, Detective Tommy Clark, with the Division of Insurance Fraud, determined that MiraLink was utilizing an unauthorized carrier to issue bogus workers' compensation policies. Investigators found that Regency Ins. Co., located in the West Indies, was pushing its products around the country. As the investigation broadened to include the Federal Bureau of Investigation, the evidence started to show that some employee leasing companies knowingly bought the bogus coverage. In all, the FBI interviewed suspects in Arizona, Illinois, Alabama, Kentucky, and South Carolina.

In addition to the recent indictments, several other individuals are awaiting sentences for their role in the scheme. Thomas King, owner of MiraLink, was found guilty in 1995 on 23 counts of wire fraud, mail fraud, and money laundering. He is facing a possible 20-year prison sentence and a fine up to $5.8 million in restitution to the victims. Michael Lee McCafferty, the former chief financial officer of TTC Illinois was sentenced on April 18 to three years in prison and ordered to pay $7 million in restitution. TTC was once one of the largest leasing companies in the state with offices and Tampa and Boca Raton.

Sink praised the investigators and said the case sent a message that the state had zero tolerance for unscrupulous behavior. “I want to thank every investigator, every attorney, and every criminal analyst who helped bring these men to justice,” she said. “Providing workers' compensation coverage is both a legal and a moral obligation, and we owe it to these injured workers and their families to make these individuals answer for what they did,” she said.