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Construction Company Pleads Guilty To $178G Fraud Payroll Scheme

17 Jun, 2009 WorkersCompensation.com

                               
New York, NY (CompNewsNetwork) - A roofing construction business and its owner have entered guilty pleas and have repaid the New York State Insurance Fund more than $178,000 in connection with a scheme to cheat on workers compensation insurance premiums.

The company, Art Roofing, Inc., and its owner, Arjan Coku, entered the guilty pleas on June 12, as a result of a premium fraud prosecution initiated by Manhattan DA Robert Morgenthau's Labor Racketeering Bureau.

The case was part of an ongoing investigation by the district attorney's office into companies that use "off-the-books" payrolls. The scheme allowed Art Roofing to cheat on insurance premium payments made to NYSIF, the state's largest workers' compensation insurance carrier, over a seven-year period.

NYSIF fraud investigators from its Division of Confidential Investigations said cash payments were made by Art Roofing to its employees, which allowed the company to underreport its payroll by $454,130 from 2001 to 2007.

"NYSIF is grateful to DA Morgenthau and his Labor Racketeering Bureau for investigating and prosecuting this case," NYSIF Executive Director James J. Wrynn said. "Premium fraud is the most costly type of workers' compensation fraud. It places an extra economic burden on anyone residing or doing legitimate business in New York. NYSIF pursues premium fraud aggressively because we want honest businesses to have a level playing field and, just as important, we want workers to receive the guaranteed protections they are entitled to under the law."

Art Roofing, Inc., pleaded guilty to a felony fraud charge of fraudulent practices in violation of the Workers' Compensation Law. Mr. Coku, the owner of the corporation, pleaded guilty to the misdemeanor of offering a false instrument for filing.

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