Tom Gallagher, Florida CFO
Arrests, along with laws passed in 2003 that created tougher penalties for workers’ compensation fraud, have pushed workers’ compensation premiums down for three consecutive years.
Florida Fraud
Fla. pursues fraud, arrests 150 individuals; workers’ comp rates drop
Aggressive pursuit of workers’ compensation fraud and the arrests of more than 150 individuals on charges of workers’ comp fraud is resulting in lower costs to Florida’s small businesses, according to Tom Gallagher, Florida CFO.
The Department of Financial Services, Division of Insurance Fraud’s is on target to surpass last year’s record of 213 workers’ compensation fraud arrests.
In February 2006 alone, the division made 25 workers’ compensation fraud arrests, almost one a day, and since July 1, 2005, has arrested more than 153 individuals on charges of workers’ compensation fraud.
Arrests, along with laws passed in 2003 that created tougher penalties for workers’ compensation fraud, have pushed workers’ compensation premiums down for three consecutive years.
Gallagher spearheaded the passage of Senate Bill 50A in 2003 that reform-
ed the state’s workers’ compensation sys-
tem, including tougher penalties for
workers’ compensation fraud and
premium evasion. Workers’ compensation rates have dropped by more than 30 per-
cent in two years, generating nearly $1 billion
in savings.
Recent arrests include:
• Edward L. Bee, 47, owner of Bee Corp., Inc. doing business as Harris Electric
in Bartow, Fla., was arrested for failing to provide workers’ compensation coverage for a worker who suffered fatal burns after a transformer exploded. Bee is charged with workers’ compensation fraud and grand theft, both third-degree felonies punishable by up to five years in prison and $5,000 in fines. The accident occurred at a job site in Fort Meade.
• Six men were arrested in a multimillion-dollar workers’ compensation insurance scheme that involves hundreds of general contractors throughout South Florida. The men are accused of setting up shell companies, which had no equipment or employees, to insure one or two people to receive legitimate insurance certificates. Contractors would give the shell company a check, which would be cashed at a Pompano Beach check-cashing store. The contractor would then pay his employees in cash, thus avoiding paying the proper workers’ compensation insurance premium.
• Jose Uriarte, 33, owner of Uriarte Framing Inc. in Clermont, was arrested after being ordered to stop work at three construction sites because he did not have workers’ compensation coverage for his workers.
The DFS’s Division of Workers’ Compensation issued Uriarte a Stop Work Order (SWO) last April and a second one in October at construction sites in East Orange County when he was found employing a crew without workers’ compensation coverage. Uriarte’s most recent SWO was issued in February when investigators found him with a crew working in Osceola County without workers’ compensation coverage. Uriarte is accused of falsely claiming that the employees were leased as an explanation why he had no coverage for them.