Thirty-two Westchester County employers will pay more than a half-a-million dollars for workers”™ compensation fraud, according to local and state law enforcement officials.
The arrests were announced late last month and were a result of a sweep by the state Office of Fraud Inspector General.
The employers in question are accused of falsely affirming in affidavits submitted to the New York State Workers”™ Compensation Board that they have no employees and run their business themselves, said Robert Bennett, senior investigator with the New York State Police in Hawthorne.
This was done so the employers could avoid paying for workers”™ compensation for their employees, he said. Under state law, business owners who have employees are required to purchase workers”™ compensation insurance to cover them.
“In some cases, these employers had six, seven, or eight employees,” said Bennett.
The majority of the businesses cited were restaurants, delis, pizza parlors and Chinese food restaurants.
Office of Fraud Inspector General John Burgher said the median cost for workers”™ comp insurance coverage in the state is around $3,000 per employee. Now, he said, many of these employers face fines of several thousand dollars.
“This levels the playing field for those who play by the rules,” said Burgher. “We are confident these arrests will send a clear message that we are aggressively looking for employers who don”™t abide by our worker”™s compensation laws.”
Officials did not say if any of the employees at any of the businesses were illegal immigrants.
Each of the business owners is charged under state workers”™ compensation law and state penal law with fraudulent practices, a class E felony; first-degree offering a false instrument for filing, a class E felony; and failing to secure workers”™ compensation benefits, a misdemeanor.
The investigation, conducted with help from the county district attorney’s office and Department of Health, is the largest sweep of its kind since the creation of the state Office of Fraud Inspector General in 1996, officials said.
The penalties are based on the number of employees left uncovered by insurance and the amount of time they were uncovered.