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Florida Business Owner Arrested for $1.8M Workers’ Comp Fraud Scheme

April 13, 2016 by  
Filed under Blog

Florida Chief Financial Officer Jeff Atwater announced the arrest of Maira Chirinos, owner of Pompano Beach construction company Tocoa Builders, Inc. Chirinos is alleged to have misrepresented information regarding Tocoa Builder’s operations, employees and payroll when applying for a workers’ compensation policy. By doing so, Chirinos allegedly avoided at least $1.8 million in workers’ compensation premium payments.

Workers’ compensation policies protect employees in the event of an on-the-job injury and if proper policies are not in place, injured employees could be faced with lost wages and costly medical expenses to cover.

The Florida Department of Financial Services, which operates under the direction of CFO Atwater, began investigating Chirinos for violating a “stop work” order. Stop work orders are issued when companies are found to be in violation of workers’ compensation laws.

This initial investigation provided authorities with information that exposed Chirinos’ larger scheme of allegedly falsifying information to avoid paying for an adequate workers’ compensation policy. As a result, a second investigation was opened, led by the Department’s Bureau of Workers’ Compensation Compliance and Division of Insurance Fraud.

Workers’ compensation policies are calculated by factoring in a company’s total payroll and number of employees along with the risks associated with the company’s field of work, among other factors. Investigators discovered that Chirinos allegedly lied when obtaining a workers’ compensation insurance policy from Madison Insurance Company to cover Tocoa Builders, Inc. She did so by grossly underreporting the company’s payroll, number of employees, and day-to-day operations.

During the dates represented on the policy paperwork, more than $11 million in payroll checkers were cashed, far more than the $76,000 that was reported.

Chirinos allegedly used a Broward County money service business to cash her company’s payroll checks; a common method of circumventing workers’ compensation statutes. By misrepresenting the amount of Tocoa Builder’s payroll, employees and the businesses operations Chirinos was allegedly able to avoid more than $1.8 million in workers’ compensation premium dues.

Chirinos was arrested without incident and charged with workers’ compensation premium fraud and grand theft, both of which are first degree felonies. This case will be prosecuted by the Office of State Attorney Michael J. Satz of the 17th Judicial Circuit and if convicted, Chirinos faces up to 20 years in prison.

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