New York Contractors Arrested in Workers’ Compensation Fraud Scheme
Two New York state contractors were arrested on charges they filed fraudulent applications for a roofing project in Amsterdam, N.Y., as part of a workers’ compensation fraud scheme.
Jose A. Sanchez, owner of Sanchez Partners Construction, was charged with offering a false instrument for filing in the first degree, a felony, and the workers’ compensation crime of failure to secure compensation, a misdemeanor.
Leroy E. Nelson, owner of JRN Construction, was charged with offering a false instrument for filing in the first degree, a felony.
An investigation by Catherine Leahy Scott, New York state workers’ compensation fraud inspector general, found that in late October and November 2018, the City of Amsterdam Engineering Department Division of Building and Zoning Enforcement issued stop work orders for a residential roofing project on Pulaski Street for lack of a building permit.
On December 5, 2018, Sanchez applied for a building permit from the city and submitted a document indicating he had no employees and therefore was not required to purchase workers’ compensation insurance.
The investigation determined Sanchez actually had several employees working on the roofing project and New York state law requires employers to provide workers’ compensation insurance for any employees they hire.
Subsequent to Sanchez being denied a permit by the city, Nelson applied for a permit for the same project on Dec. 6, 2018, indicating his company, which has workers’ compensation insurance, would perform the work. The investigation determined Sanchez’s company instead continued to perform the work on the roof and Nelson’s company was not involved with the project.
Separately, in 2016, Nelson pleaded guilty to criminal possession of a forged instrument, a falsified workers’ compensation certificate of insurance.
“These two contractors, one of whom with a recent history of fraud, chose a course of deception over honest business practices,” said Leahy Scott in a press release issued by her office. “My office and our local and state enforcement partners will not tolerate any corruption of a critical benefits program meant to protect honest hard-working employees.”
Sanchez and Nelson were both arraigned in the Amsterdam City Court and released on their own recognizance pending their reappearance in court on May 29, 2019. The defendants are presumed innocent until proven guilty in a court of law.
Source: New York State Offices of the Inspector General