Custom parts maker ordered to pay in comp fraud case

A Texas company pleaded guilty Tuesday to workers compensation premium fraud and has been ordered to pay $250,000 to its insurer, the Texas Department of Insurance announced on Tuesday.

Alpha Mar, which makes custom parts for various industries and is based in Houston, entered the plea in a Travis County District Court in Austin, Texas, and will pay $250,000 to Texas Mutual Insurance Co.

From 2008 to 2012, John Stergion of Alpha Mar concealed payroll and misrepresented the number of employees the company had, resulting in a lower workers comp policy premium, according to a statement.

“When companies commit premium or payroll fraud, they can put their employee’s coverage at risk,” Debra Knight, the department’s deputy commissioner of compliance and investigations, said in the statement. “It gives dishonest companies a business advantage over ethical companies that are paying the full cost of their premiums.”

Mr. Stergion could not immediately be reached for comment.