Florida Man Sentenced for Workers’ Compensation Insurance Fraud in Construction Industry (Insurance Journal)

Florida Man Sentenced for Workers’ Compensation Insurance Fraud in Construction Industry

  Tuesday, November 21st, 2023 Source: Insurance Journal

Ramon Paz, owner of a construction service company in Lakeland, Florida, has been sentenced to 33 months in federal prison for wire fraud conspiracy related to workers’ compensation insurance. Paz’s company, obligated under Florida law to provide adequate insurance coverage, misrepresented its payroll and employee numbers in insurance applications. By doing so, Paz significantly underreported his company’s workforce and payroll to the insurance company.

Paz’s fraudulent activities involved more than $21 million in checks from construction contractors for "employees" who were actually under the contractors’ supervision. These misrepresented figures led to a lack of sufficient insurance coverage for workers on job sites, with Paz’s company disclaiming responsibility for legal work authorization and payroll taxes. Contractors thus evaded responsibilities and costs associated with legally employing these workers.

The case, investigated by Homeland Security Investigations and the Florida Department of Financial Services, is part of an extensive probe into the misuse of shell companies and ghost employees in the construction industry. Paz, who pleaded guilty in February 2023, is also ordered to forfeit over $500,000, the proceeds of his fraudulent activities.

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