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Siblings Must Pay $6.3 Million for Workers’ Compensation Fraud Scheme

handcuffs-2102488_1280-300x169A California-based brother and sister will have to pay more than $6.3 million in restitution after entering plea deals with for their part in a workers’ compensation fraud scheme.

Together with his sister Gloria, Enrique Vera operated Ultimate Inc., a construction company based in Los Angeles. As part of her plea deal, Gloria Vera, age 58, pleaded no contest to one felony count of insurance fraud and one felony count of workers’ compensation fraud. She had initially faced three counts of insurance fraud, five counts of workers’ compensation fraud, and three counts of felony grand theft of labor.

Enrique Vera, age 48, pleaded no contest to one felony count of grand theft of labor and one felony count of workers’ compensation fraud. Enrique had been facing three felony counts of grand theft of labor and four of workers’ compensation fraud.

The Veras submitted forged payroll records to the State Compensation Insurance Fund (State Fund) with the intention of fraudulently lowering their workers’ compensation insurance premiums. They defrauded State Fund of $6.3 million.

In addition, during a student accommodation renovation project at UCLA, Enrique Vera paid his workers at a rate below the prevailing wage in direct conflict with the terms of their contract with UCLA. Gloria Vera, meanwhile, concealed injuries sustained on the job by workers. In so doing, Gloria Vera denied the laborers their legal right to workers’ compensation.

In recent months, I have reported on similar cases from across the country. In Ohio, for example, the owner of Elite TNT Enterprise—a freight hauling and trucking company—was sentenced to two years of probation and pay over $140,000 in restitution for failing to carry workers’ compensation insurance for his employees. In Massachusetts, the owner of employment agency UT Services has been charged with underreporting payroll in order to reduce his workers’ compensation premiums. He faces up to 20 years in prison and a fine of up to $500,000.

Workers’ compensation dues can represent a hefty overhead for business owners. The costs of workers’ compensation vary dramatically depending on the field you work in. For example, in Florida, a business owner who employs people to work in an office may expect to spend $0.11 per $100 of payroll on workers’ comp. If a business owner works in roofing, however, that cost shoots up to over $20 per $100. In California, premiums for a roofer range from about $24 all the way up to about $80 per $100 of payroll. Employers will face higher rates if they are new companies or if they have had several claims made against them.

As part of their plea deal, the siblings have agreed to pay $6.3 million in restitution to State Fund as well as pay the $5,000 that the investigation against them cost. They will also pay $30,000 in fines. The siblings will be electronically monitored for 12 months and will need to complete 500 hours of community service.

If Gloria and Enrique Vera meet these requirements by October 2020, they will be placed on 18 months’ probation and their convictions will be reduced from felonies to misdemeanors. If they do not meet requirements, Gloria Vera faces nine years in prison while her brother is facing eight years and eight months in custody.

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.

Sources

2019-04-24 Construction Company Operators Plead in Fraud Case