Owner Everardo Borettini of EFC Construction Corporation faces charges of fraud for a scheme to avoid paying workers’ compensation premiums. Borettini, who plead not guilty in Dade County after being arrested on September 23, 2020, is being charged with grand theft, an organized scheme to defraud, and workers’ compensation premium fraud. He faces 25 years in prison or more.
The investigation into the case was carried out by the Florida Bureau of Investigative and Forensic Services, Division of Workers’ Compensation Fraud. The defendant has claimed only $68,648, or 4% of his payroll when the company had actually more than $1.5 million payrolls. The difference of $95,000 in premiums could have placed his employees in jeopardy when attempting to file workers’ compensation claims in the future.
Jimmy Patronis, Florida’s Chief Financial Officer, said recently, “Businesses having the appropriate coverage for their employees is extremely important and avoiding carrying adequate workers’ compensation insurance is a crime, placing injured workers at risk and ultimately inflating insurance rates for honest businesses.”
Florida is one of several states that cracked down on this kind of fraud with tough legislation over the past 30 years. It was thought that widespread employee workers’ comp fraud was more prevalent; however, information collected during the heightened attention to the issue has shown that the bigger fraud problem was employers. Research into workers’ comp fraud found that less than 1% of all fraudulent claims were filed by employees. The initial belief and focus on employee fraud led to an atmosphere of fear among employees who needed to file legitimate claims.
Employers like the Florida construction owner not only under-report payroll in order to avoid paying higher premiums; they also pay some workers cash, claim some of their workers are subcontractors, or they otherwise misclassify employees. Another ploy to avoid premiums for workers’ comp is when an owner reports they have no (or few) employees and then diverts the true payroll to a nonexistent shell company. Fraud investigators found one such employer who underpaid over $700,000 in premiums.
Another way employers try to avoid workers’ comp premiums involves hiring illegal immigrants. Employers accept fraudulent paperwork from the workers but don’t report them as employees until after an injury. The result is that the employers avoid having to pay workers’ comp at all while the injured worker is denied benefits and then charged with a felony.
Illegal immigrants are also a group being taken advantage of by employers who are avoiding premiums. These businesses are accepting fraudulent paperwork when they hire these immigrants and then report the immigrants if they are injured on the job.
Out of 548 arrests made in 2014-15 in Florida for workers’ comp fraud, 278 were employers. The prosecution of 208 of those was successful. The state of Florida levied $52,422,087 in penalties against employers for misstating coverage. A company that defrauds the state faces penalties equal to 2 times what the company would have paid in premiums, or $1000, whichever is greater.
Workers’ compensation fraud hurts both employers who do the right thing as well as employees who need coverage but find it inaccessible. If you suspect fraud, contact FraudFreeFlorida.com. If you need legal advice or representation concerning a workers’ comp claim, contact us.
South Florida Workers’ Comp Fraud Attorney
Are you accused of committing workers’ compensation fraud? Contact Brian Silber, P.A. to set up a free initial consultation with one of South Florida’s most experienced workers’ compensation fraud attorneys.