Carmen Montalvo-Rivera of Miami Florida was arrested in Lake Worth last week after allegedly defrauding an insurance company out of millions of dollars. She is being charged with insurance fraud and was released from police custody on $47,500 bond the day after her arrest. News sources did not specify an attorney for Montalvo-Rivera.
According to the arrest report, the alleged fraud took place from June 1 until Montalvo-Rivera’s arrest on October 27. Montalvo-Rivera, 40, purportedly operated a shell company called Enterprises Remodeling Group Inc., which investigators say paid uninsured contractors to perform construction work. Contractors would reportedly write checks to Montalvo-Rivera’s shell company once a job was completed; she would cash the checks and pay the contractors in cash.
Records allegedly show that Enterprises Remodeling had a workers’ compensation insurance policy with SUNZ Insurance Company, but investigators claim Montalvo-Rivera severely underreported her company’s earnings to the firm. She allegedly reported her company’s income as $26.665 instead of the real amount: $4,307,092.48.
Investigators say if Montalvo-Rivera had reported the true amount, her insurance premium would have been between $320,000 and $525,000 instead of just $1,796. To avoid detection, she reportedly cashed the checks at different check-cashing stores in South Florida.
According to the Coalition Against Insurance Fraud, one in 10 small-business owners are concerned employees will fake an illness or injury to steal compensation benefits. Some businesses illegally try to avoid paying mandatory workers compensation insurance premiums by classifying employees as independent contractors. Misclassification of this kind allows business owners to avoid taxes and other expenses.