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The New York State Insurance Fund announced the arrests of two Long Island builders and one claimant in separate cases of alleged workers compensation fraud with a potential total of more than $1 million.
All three arrests took place August 27, resulting from joint investigations by the Suffolk County District Attorney Insurance Crime Unit, the New York State Insurance Department Frauds Bureau, the Workers’ Compensation Board Fraud Inspector General’s Office and NYSIF’s Division of Confidential Investigations.
“NYSIF has mounted an aggressive campaign against workers’ compensation fraud for many years thanks to the cooperation and assistance of our investigative counterparts at other agencies and the law enforcement community throughout New York State,” NYSIF Chief Deputy Director Francine James said. “We thank Suffolk County DA Thomas Spota for the arrests in these cases. Given the burden it places on honest businesses, consumers and taxpayers, workers’ compensation fraud is a crime that must be taken seriously.”
Investigators said a Morganville, New Jersey, man, John Barone, is charged with fraudulent insurance practices as a felony. According to investigators, Barone, 66, owns a carpentry business, Byram Associates of Valley Stream, NY, employing approximately 20 people. He allegedly falsely reported to NYSIF that he operated an architectural business with one employee to defraud NYSIF in premium payments of approximately $657,000.
John Rusnak, 49, of Freeport, NY, also faces a felony charge of fraudulent insurance practices. Investigators said Rusnak, doing business as Colt Contracting of Syosset, NY, allegedly understated the nature and actual payroll of his business to defraud NYSIF of $104,177.
Monica Martinez, 37, also of Freeport, was charged with fraudulent insurance practices for allegedly working while maintaining in documents she signed and returned to NYSIF that she had not returned to any form of work since suffering a back injury as a dental assistant in 2005. Investigators said Martinez, who was receiving $400 per week for a temporary total disability, allegedly returned to work as a dental assistant while defrauding NYSIF of $39,360. NYSIF estimated the potential savings on her claim to be $270,000 if she is convicted.
Criminal complaints and indictments are accusations only. Defendants are presumed innocent until proven guilty.
NYSIF is a non-profit organization of the state of New York that was created as part of the Workers' Compensation Law of 1914. 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 185,000 employers hold NYSIF workers' compensation insurance policies, constituting about 37 percent of the market.