Florida authorities have arrested two businessmen who own a business in the city of Hialeah, who are accused of committing workers’ compensation fraud.
According to the medium Local 10 Newsthe subjects were identified as Lester and Francisco Picado, who were arrested after an investigation by state detectives.
Authorities say the two businessmen, now facing first-degree grand theft charges, made false or misleading representations in order to obtain workers’ compensation benefits.
The report indicates that the Picados carried out a significant scam by decreasing the payroll figures of the Superior Drywall company, which is dedicated to the sale of drywall.
The pair reportedly retained the services of an outside company to handle payroll and workers’ compensation coverage, but instead of providing the true figures, the subjects falsified the numbers, claiming that the payroll was almost 100 times lower than the true one.
And it is that the investigation revealed that Superior Drywall reported a payroll of 38,000 dollars, when this exceeded 3.2 million dollars.
In that sense, the authorities calculated that, had they reported the true figures, they would have had to pay a worker’s compensation premium of almost $200,000, as well as some $162,000 in administrative fees.
Similarly, it was revealed that both were cashing checks for millions of dollars at a local check cashing store, indicating to authorities that they planned to hide the income their business generated.
The pair was sent to the Miami-Dade jail, but authorities’ records indicate that they are no longer in custody after posting their bond.
Payroll compensation fraud is a form of fraud in which an individual manipulates or misrepresents an organization’s payroll records to illegally obtain financial gain. This type of fraud typically involves altering information related to wages, hours worked, or deductions in employees’ payroll records.
If found guilty, the Picados could face up to five years in prison. Similarly, the court could order them to pay restitution to the victims of this fraud, which could include repayment of unpaid insurance premiums.
Those businessmen who are caught committing this crime often lose their business license, which could have consequences when trying to operate another business in the future.
