New York Contractor Who Evaded Taxes Arrested Again, Now for Workers’ Compensation Fraud

New York, NY  (CompNewsNetwork) - A Port Jefferson New York construction contractor already convicted of tax evasion faces two more felonies after his arrest Thursday on charges he also avoided workers' compensation premiums.

Gary Woltmann, the president of Woltmann Associates, allegedly used an off-the-books payroll scheme to avoid paying $150,000 in workers' compensation premiums to his insurer, American International Group, in the policy years 2002-2003 through 2006-2007. He also allegedly defrauded New York State out of $36,000 in payroll taxes.

Woltmann faces two Class E felonies: one count each of fraudulent practices and offering a false instrument for filing in the first degree. Under New York state penal law and workers' compensation law, businesses with employees must carry insurance to cover workers who may be injured on the job. These charges are punishable by one and a third to four years in prison, fines up to $50,000, and restitution.

"Protecting employees with workers' compensation insurance is not optional in New York," Chair Zachary S. Weiss said. "When employers avoid that insurance, they're jeopardizing their workers, and counting on honest businesspeople to bail them out."

On Sept. 17, 2007, Woltmann pleaded guilty to 20 charges that he avoided $220,000 in federal payroll taxes in this same case. While he has not been sentenced yet, he faces 21 to 27 months in prison under federal sentencing guidelines for that offense. Woltmann will also repay those federal payroll taxes.

"The charges in the federal case alerted us to the possibility of the workers' compensation case," Fraud Inspector General John Burgher said. "This is the result of cooperation between state, county and federal entities."

The Board was brought into the investigation last May by the office of Suffolk County District Attorney Thomas Spota. It worked with that office and the Internal Revenue Service Criminal Investigations Division in both these investigations.

"Workers' compensation is a lifeline for injured workers who are physically unable to earn an income," Thomas Spota said. "The goal of our partnership with the Workers' Compensation Board and federal law enforcement is to protect New Yorkers from the higher operating costs, higher prices for goods and services, and higher insurance premiums that result from insurance fraud."

In 2006, investigations by the Workers' Compensation Board Office of the Fraud Inspector General resulted in 119 arrests and prosecutions, while the Compliance unit referred another 113 prosecutions to the attorney general. The Board also returned a record $6.2 million to victims of fraud.

The charges in this case are merely accusations and the defendant is presumed innocent unless and until proven otherwise by a court of law. The Workers' Compensation Board equitably and fairly administers the provisions of the New York State Workers' Compensation Law on behalf of New York's injured workers and their employers. To report workers' compensation fraud, call 888-363-6001.

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