An owner of a New Jersey residential roofing and construction company pled guilty this week and may face serious prison time for stealing over $450,000 in unpaid workers? compensation premiums and state income tax.? Herlindo Garcia-Merlos was president of Orients Construction Company, Inc in Trenton, New Jersey until March 2009, when he began doing business as Melrose Construction, Inc.? Yesterday, he pled guilty to two counts of second-degree theft by deception for reporting false information to his companies? workers? compensation insurance carrier and to the state of New Jersey tax office regarding the wages he himself earned.? He also failed to file corporate tax returns for his companies over the five years covered by the investigation which led to his arrest.
A press release from the office of New Jersey Attorney General Jeffrey S. Chiesa quoted Acting Insurance Fraud Prosecutor Ronald Chillemi who said:
?This defendant was responsible for making sure that he had adequate and lawful workers? compensation coverage for his companies.? By providing misinformation to his workers? compensation carrier, he not only failed in this responsibility but also defrauded an insurance company out of hundreds of thousands of dollars.? The cost of such fraud is passed on to consumers through increased premiums.?
Under the plea agreement, the state will recommend that Garcia-Merlos be sentenced to eight years in state prison.? In addition, the state is seeking restitution on behalf of New Jersey Manufacturers Insurance Group in the amount of $315,680 and New Jersey Department of Treasury in the amount of $135,462.
Chillemi also said that some important cases have started with anonymous tips.? People who are concerned about insurance cheating and have information about a fraud can report it anonymously by calling the toll-free hotline at 1-877-55-FRAUD (1-877-553-7283), or by visiting the web site for the New Jersey Office of the Insurance Fraud Prosecutor.
Source: http://www.constructioncitizen.com/blog/new-jersey-contractor-guilty-stealing-450K/1211291
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