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Construction Company Owner Charged with Workers’ Compensation Fraud

boston-3690818_1920-300x200A construction company owner in Massachusetts has been indicted for allegedly concealing payroll in order to reduce his workers’ compensation insurance premiums by tens of thousands of dollars.

Anner Valentin Amaya, age 45, of Revere, a city north of Boston, is the owner of Valetin’s General Contractors Inc. which also does business as Valentin’s Home Improvement. His company has worked on home renovations in the Boston and Cape Cod areas. The Insurance Fraud Bureau of Massachusetts began looking into Amaya’s business practices before referring the investigation to the state Attorney General’s Office.

Charges against Amaya allege that, when his business was audited by the company which provided his workers’ compensation insurance, he underreported both the number of people he employed and also the amount he paid them. By concealing his payroll in this manner, the charges allege, Amaya was able to pay workers’ compensation insurance premiums far below the correct rate.

Workers’ compensation insurance can be a costly overhead for businesses. In Massachusetts, as of January 2018, the average cost of workers’ compensation insurance is $1.37 for every $100 of payroll. While this is below the national average—and less than half of New York’s average rate of $3.08 which is the highest in the country—it nonetheless represents an expense businesses in competitive fields may find it hard to afford. For high-risk industries such as construction, the cost of insurance can be dramatically higher.

I have reported on other cases where businesses have attempted to hide their payroll in order to reduce workers’ compensation expenses. In California, for example, Salvatore Carbone was found guilty last year of workers’ compensation fraud. Between August 2014 and August 2015, Carbone falsely claimed he was the sole employee of the bar he owned, Carbone’s Bar. Carbone was sentenced to 40 days in jail and also three years’ probation. Meanwhile, in Florida, Vanessa Arreguin was charged with three felony counts of concealing payroll while allegedly avoiding paying more than $50,000 in workers’ compensation insurance premiums.

By reducing the cost of doing business, companies that attempt to avoid paying workers’ compensation insurance are able to give themselves an unfair advantage in the marketplace: they can undercut the prices of businesses that play by the rules.

“Worker’s compensation fraud puts employees at risk and drives up insurance rates for honest businesses,” said Jimmy Patronis, Florida’s CFO. Commenting on Arreguin’s case and the broader situation in Florida, he said: “Last year alone, our fraud detectives made more than 400 arrests for workers’ compensation fraud.”

The Attorney General’s Office’s investigation alleges that between May 2012 and August 2016, Amaya avoided paying over $73,000 in workers’ compensation insurance dues. The Suffolk County Grand Jury charged Amaya with five counts of Larceny over $250 by False Pretenses, five counts of Workers’ Compensation Fraud, and two counts of Failure to Provide Workers’ Compensation Insurance.

Assistant Attorney General Kristy Lavigne is prosecuting the case with help from Philip Mantyla, a senior investigator at the Insurance and Unemployment Fraud Unit. Investigators with the Insurance Fraud Bureau are also assisting.

Amaya will be arraigned on April 17 at Suffolk Superior Court in Boston.

Florida Workers’ Compensation Fraud Defense Attorney

If you are involved in a worker’s compensation fraud investigation, then you should hire a lawyer. Contact us to set up a free initial consultation and work with one of Florida’s most experienced workers’ compensation fraud defense attorneys.


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