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A Florida woman was sentenced to 18 months in federal prison and ordered to pay more than $600,000, including $18,603 in restitution to American International Group Inc., for a workers compensation fraud scheme she orchestrated.
Between May 2013 and May 2016, Orquidea Quezada of Orlando, Florida operated a comp insurance scheme that funneled about $17.4 million through her company, Winter Park, Florida-based Orquicely Construction L.L.C., to subcontractors who frequently employed undocumented workers, according to a statement issued by the U.S. Department of Justice on Wednesday.
Orquicely Construction obtained workers comp insurance policies to cover between two and seven employees with an annual payroll of about $100,000, according to the statement. Ms. Quezada then “rented” the policies to subcontractors who employed hundreds of workers, including many who were not legally authorized to work in the United States, the statement said.
The scheme involved Ms. Quezada directing her insurance agent to send the subcontractors a certificate of insurance indicating their workers would be covered. The subcontractors then wrote payroll checks to Orquicely Construction for work performed, and Ms. Quezada cashed the checks and paid the subcontractors’ employees in cash, the statement said. Ms. Quezada retained 5% of each check as a fee.
Neither Orquicely Construction nor the subcontractors deducted federal and state taxes, and subcontractors avoided paying these taxes along with workers comp taxes premiums, the statement said.
Ms. Quezada pleaded guilty in September to charges of wire fraud and operating as a money transmitter. In addition to restitution to AIG and a $584,435 judgment she was ordered to pay at sentencing, Ms. Quezada also was ordered to forfeit $136,886 in cash, $60,1789 in bank account funds and a vehicle valued at $11,500 that investigators seized when they arrested her.
“Employers who attempt to evade the law and fail to provide workers compensation coverage leave their employees vulnerable to extraordinary costs in the event of an on-the-job injury,” Florida Chief Financial Officer Jeff Atwater said in the statement. “Not only are employees left at risk, but when bad actors save thousands by not paying for insurance policies, they can skew the competitive market by bidding on projects at a much cheaper rate — making it difficult for law-abiding employers to win job contracts.”
An Ohio man pleaded guilty to one count of workers compensation fraud for continuing to work while collecting comp benefits from the Ohio Bureau of Workers’ Compensation, the bureau’s Special Investigations Department said Monday.