Father/Daughter Concrete Biz Indicted On Hiding Payroll
March 11, 2008
NYSIF CEO/Executive Director David P. Wehner announced the indictment of a father and daughter on charges of workers’ compensation fraud for allegedly concealing the number of employees working for their concrete business.
Augusto Fernandes and his daughter, Sonia Rodriguez, corporate officers of F&G Concrete Corp., located in Holstville, NY, were arraigned in Suffolk County Court on March 5, 2008 on charges contained in the indictment.
A Suffolk County Grand Jury indicted the pair and their corporation on February 8, for fraudulent practices, offering a false instrument for filing and insurance fraud — all felonies — in connection with allegedly underreporting the number of employees on their payroll to deliberately cheat on their workers’ compensation premium during 2005 and 2006.
NYSIF estimated the premium owed by F&G at approximately $204,000.
“Worker misclassification and underreporting payroll is a grave concern in New York State, where several state agencies have initiated a crackdown on this serious problem by targeting employers who don’t play by the rules,” CEO Wehner said. “NYSIF has continued to work with the New York State Insurance Department Frauds Bureau, the Workers’ Compensation Board Fraud Inspector General and law enforcement authorities across the state to bring these employers to justice.”
In February, a New York State Joint Enforcement Task Force released its first report on worker misclassification in New York State. In just four months, the task force found over 2,000 employees misclassified as independent contractors or paid “off-the-books” by employers to avoid paying proper wages, overtime, employment taxes, workers’ compensation insurance and other employee benefits and protections.
NYSIF’s Division of Confidential Investigations initiated the investigation of F&G. Interviews with employees and payroll records seized on a search warrant obtained by the Suffolk County DA Insurance Crime Bureau led to the indictment. Investigators presented evidence to the Grand Jury that allegedly showed that F&G reported substantially lower payroll amounts on their NYSIF policy audits to avoid paying the proper workers’ compensation premium.
Criminal complaints and indictments are accusations only. Defendants are presumed innocent until proven guilty.