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Construction firm owner arrested in $1 million comp scam

Posted On: Nov. 6, 2017 2:41 PM CST

Construction firm owner arrested in $1 million comp scam

A construction company owner in Jacksonville, Florida, is facing up to 60 years in prison after underreporting his payroll figures, resulting in lower workers compensation premiums, state regulators announced Friday. 

Carlos Contreras, owner of DJC Builders & Construction, allegedly obtained a fraudulent workers compensation policy by underreporting the number of staff he employed, the company’s annual payroll amount, and the company’s scope of work — false information that allowed him to avoid paying more than $1 million in premium payments for an adequate policy, according to a statement by Florida Chief Financial Officer Jimmy Patronis and the Department of Financial Services. 

Mr. Contreras claimed his company’s annual payroll was $273,786 and was subsequently quoted an annual workers comp policy premium of $25,311. However, between January and August 2017, state investigators determined that he cashed at least 620 payroll checks for DJC Builders & Construction. In total, nearly $6,500,000 in payroll was cashed using various money service businesses located across the state, according to the statement. 

If Mr. Contreras had accurately reported the company’s total payroll, number of employees and correct work descriptions, the company’s proper workers comp premium would have been $1,217,161, according to the statement. 

“When companies lie to obtain cheaper, inadequate workers compensation policies, staff or property owners are left vulnerable to covering sky-high medical costs if a worker gets injured on the job, and free markets are disrupted by scammers who can underbid their legitimate competitors,” Mr. Patronis said in the statement.

Mr. Contreras was arrested on Oct. 19 and transported to the Duval County jail. He has been charged with one count of knowingly concealing payroll and one count of scheme to defraud, according to regulators.