A Florida construction company owner pleaded guilty in a $21 million workers’ compensation fraud scheme.
Ramon Paz is facing a maximum penalty of 20 years in federal prison after pleading guilty to one count of conspiracy to commit wire fraud.
A sentencing date hasn’t been set at this time, according to the U.S. Department of Justice.
Employees were actually undocumented immigrants
Paz owned and managed a construction company that he registered with the state in December 2016. This company claimed to supply construction services and labor to work for construction site contractors.
Paz’s company had agreements with contractors and subcontractors to use workers purported to be Paz’s employees but who were often undocumented immigrants who actually worked for the contractors. Paz would regularly receive payroll checks from the contractors to pay for these “employees” and other related expenses.
Claimed he had limited payroll
To comply with Florida law, the company was required to have adequate workers’ compensation insurance coverage. However, Paz fraudulently represented in insurance applications that his company had a limited payroll and employee roster that worked on construction jobsites. He also fraudulently sent wire communications to contractors representing that his company’s employees had full workers’ compensation coverage.
Instead, Paz’s company received and cashed more than $21 million in checks from various construction contractors for his “employees,” with that payroll far exceeding the limited payroll he reported to his insurance company. This meant that not only did the insurance company lose out on premiums it was owed, but the workers were also performing their jobs without workers’ compensation coverage.
All of these misrepresentations also meant that Paz’s company didn’t have to claim responsibility for ensuring its workers were legally authorized to work in the U.S. and that state and federal taxes were being paid for them. The contractors who actually paid the wages and used the workers’ services were also able to avoid responsibility for those duties.
