Florida Eyes Cash Checking Firms

Florida officials want an investigation into the role of check cashing services in helping construction subcontractors avoid paying their share of workers’ compensation premiums.

Florida Chief Financial Officer Jeff Atwater said this workers’ compensation premium fraud scheme is “highly organized and orchestrated by individuals who know the construction and subcontracting industry.” Atwater has named a group of officials to come up with recommendations by the end of the year.

According to investigators, organized crime groups set up fake companies and obtain a minimal workers’ compensation policy. Uninsured subcontractors then pay them a fee to use the workers’ compensation policy, which enables them to avoid purchasing required coverage. The uninsured subcontractors use the certificate of insurance to show general contractors they have insurance and often get a job since they can underbid projects by removing most of their workers’ compensation costs. The organized crime groups then use cash checking companies to cash the checks made out to the fake company by subcontractors.