Florida authorities have brought yet another case alleging a workers' compensation fraud exceeding $1 million.
Jose Esmelin Martinez and Uzziel Isaias Jaramillo, owners of Esmelin Corporation a/k/a/ Esmelin Roofing Contractor ("ERC") were arrested and charged with concealing nearly $1.2 million in payroll on their workers' compensation policy renewal application in an alleged attempt to illegally lower their premium costs.
"Florida will not be the state where criminals come to defraud the workers' compensation system for a cheaper, inadequate workers' compensation insurance policy," said Florida's chief financial officer, Jimmy Patronis. "Employees could be put in harm's way, forced to pay out of pocket for medical costs and law-abiding companies can't compete with a fraudulently profiting company in their market. I refuse to let these criminals skew the free market system and maximize their revenues at the expense of their employee's safety."
Investigators from the Division of Investigative & Forensic Services said that they discovered that the defendants reported an annual payroll estimate of $60,000 on their application for workers' compensation coverage. Based on their estimated payroll, their premium was determined to be $14,051.
Investigators said that they identified $288,263 in cashed payroll checks during ERC's policy period at multiple money services businesses located within the South Florida area. According to prosecutors, after further investigation, ERC was found to have received at least $1,248,416 for its labor costs – exceeding the estimated annual payroll that was previously given to their insurance provider when applying for workers' compensation coverage.
Had the actual amount of payroll been reported to their workers' comp provider, the resulting premium rate would have been set at $278,209, a difference of $264,158, according to prosecutors.
Both defendants were charged with workers' compensation fraud, grand theft, and organized scheme to defraud.