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Ohio Businessman Sentenced for Workers’ Compensation Insurance Fraud

semi-trailers-534577_1920-300x225An Ohio businessman has been ordered to pay $144,400 in restitution and serve two years of probation for his part in a workers’ compensation fraud scheme.

Robert Tate, age 50, of Mansfield in north-central Ohio, is owner and operator of Elite TNT Enterprises LLC, a trucking and freight hauling business. Elite TNT Enterprises opened its doors in December 2016. It was only a few months later, however, that the Ohio Bureau of Workers’ Compensation (BWC) learned that Tate was operating his business without workers’ compensation insurance coverage for his employees.

Workers’ compensation coverage is a legal requirement in all states except Texas and is designed to ensure employees injured at work receive medical attention and other benefits while they recover from injuries sustained at work. Workers’ compensation dues may represent a sizeable overhead for businesses, especially those involved in higher-risk industries such as trucking or construction. For example, in Florida, workers’ compensation for an office worker is around 11 cents for every $100 of payroll. However, for a roofer, this cost rises dramatically to $20.35 per $100 of payroll.

I have recently reported on businesses across the country that have sought to avoid paying workers’ compensation insurance. For example, Earth ’n Wood Products, another Ohio-based business, was found to have misclassified some of its workers—including truck drivers—as office workers. Speaking in court, defense attorney Anthony Koukoutas, asked, “What should he have done instead? I guess he should have just shut the company down or laid off employees.”

By avoiding paying workers’ compensation insurance, Earth ’n Wood Products was able to undercut honest businesses that were playing by the rules. Not only that, it placed the company’s employees at risk.

According to the Federal Motor Carrier Safety Administration, Elite TNT Enterprises was placed “Out-of-Service” in June 2017 as a result of the investigation. BWC agents attempted to work with Tate in order to bring his business into line with the law so Elite TNT Enterprises would be able to begin operations again. Tate, however, did not cooperate. This led to agents auditing Elite TNT Enterprises and subpoenaing financial records. These showed that Tate had consistently underreported payroll in order to reduce his workers’ compensation dues. Tate also reported having fewer employees than he actually had and failed to list his previous policies with BWC on his applications for coverage.

Tate was found guilty on February 20 of this year on two third-degree felony counts of tampering with records, and two fourth-degree felony counts of workers compensation fraud. A Richland County judge sentenced Tate this month and ordered him to pay the $6,953 for the cost of BWC’s investigation and $137,447 in unpaid workers’ compensation premiums. He will also serve two years of probation.

Speaking about the case, BWC CEO Stephanie McCloud explained, “We reached out to Mr. Tate several times to follow the law and protect his employees with workers’ compensation coverage, but he chose to ignore us, and it cost him.”

In another case from Ohio, Ali Ismail pleaded guilty to the misdemeanor count of failure to comply after it was discovered he owed BWC $9,442 in unpaid premiums for his company Helpful Hands Children’s Centers based in Columbus. Ismail has now paid the money owed, and BWC has reinstated his policy.

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.


2019-04-12 Ducking Workers’ Comp Coverage Costs Mansfield Freight Hauler $144K

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