Three men convicted in massive workers comp fraud

While the insurance industry likes to publicize instances where the claims of injured workers are not legitimate, these “exposes” pale in comparison to the recent verdict in Florida. This Jacksonville case involved fraud in the context of workers comp insurance and involved almost $100 million dollars ! After five weeks of testimony, a Jacksonville Florida jury convicted three business owners late last Wednesday in a nationwide employee leasing conspiracy that defrauded hundreds of thousands of workers out of insurance benefits.
The men face life prison sentences and fines totaling $17 million. In addition, federal prosecutors asked a judge for forfeitures totalling $78 million in assets they say were proceeds of the scheme. “We will continue to seek renumeration for these injured employees whose lives have been ruined,” said Assistant U.S. Attorney Mark Devereaux. He said the forfeiture money will be used to offset some of the victims’ losses.
Jurors deliberated about two days before convicting the men from California, Illinois and Arizona of mail fraud, wire fraud and money laundering.
All three had been out on bail, but U.S. District Judge Virginia Hernandez Covington remanded them into custody immediately after the verdicts were announced. She scheduled sentencing for May 23rd. Prosecutors said the men were all part of a conspiracy that used sham companies to defraud small business owners into paying premiums for non-existent workers compensation insurance. Five of the victimized businesses were in Jacksonville, Florida.
As a result, employees were left uninsured, and some suffered catastrophic financial setbacks, witnesses testified during the lengthy trial. A Kansas City man testified he lost his legs in a work-related accident and was not able to get his second prosthetic leg because the insurance he thought he had never paid for the first one. Another victim, a truck driver, suffered brain damage from an on-the-job accident but got no salary or hospitalization benefits because of the scam. “He lost everything,” said his sister, who now cares for him. “I hope they never get out for what they did to my brother.”

Posted: Thursday, February 14th, 2008 at 3:45 pm, By PAUL PINKHAM of The Times-Union Jacksonville, FL”Just In” section, found at:
https://news.jacksonville.com/justin/2008/02/14/three-men-convicted-in-massive-fraud/