NYSIF Receives First Installment on $2.5M Restitution

February 13, 2012

The New York State Insurance Fund received $500,000 this month as the first installment of restitution from a former policyholder charged with fraud for providing false business documents to NYSIF premium auditors.

The payment is the first of $2.5 million in restitution owed to NYSIF as part of a plea agreement signed by Owen O’Reilly on February 1, 2012. Mr. O’Reilly, 46, is a partner in MC & O Masonry, a Queens, NY, concrete business that had workers’ compensation insurance with NYSIF.

The Manhattan District Attorney’s Office arrested Mr. O’Reilly on January 19, 2012, following a joint investigation with NYSIF’s Division of Confidential Investigations (DCI). Mr. O’Reilly pleaded guilty to one count of fraudulent practices in violation of the Workers’ Compensation Law and one count of offering a false instrument for filing, both felonies.

Investigators said Mr. O’Reilly provided false documentation to his accountant, resulting in NYSIF auditors receiving fraudulent tax returns for the former policyholder. NYSIF audits such documents to determine if employers are paying proper premium for workers’ compensation insurance.

Authorities said he underpaid premium to NYSIF totaling $2.5 million.

NYSIF DCI is a national leader among insurance special investigation units. Last year, NYSIF’s anti-fraud program produced 141 arrests for workers’ compensation fraud and $12.8 million in restitution and estimated future savings.

NYSIF, created as part of the Workers' Compensation Law of 1914, is New York State’s largest workers’ compensation insurance carrier and the fifth largest workers’ compensation writer in the nation. By law, NYSIF is a competitive insurance carrier that sells workers' compensation and disability benefits insurance to any employer doing business in New York State. Approximately 166,000 employers hold NYSIF workers' compensation insurance policies, constituting about 31 percent of the market, while 60,000 employers maintain active disability benefits policies.