Volume 3 Number 41
October 9, 2006

Department of Financial Services button
Consumer Services HelpLine Number 800-342-2762
e-mail CFO Tom Gallagher
Press Releases button
Previous Issues button
CFO location button
Subscribe to Eviews button
Unsubscribe to eViews button
Text Version buttonFlorida Department of Financial Services logo

 

 

GALLAGHER ANNOUNCES ARRESTS IN THREE SEPARATE WORKERS’ COMPENSATION FRAUD CASES

Tom Gallagher, Florida’s chief financial officer, has announced the arrests of three individuals in Central Florida on workers’ compensation fraud charges, including one employer who did not have coverage for a worker who died after falling from a high-rise construction project.

Harry M. Zeigler, 42, president of Zeigler Concrete & Reinforcing, Inc., (Zeigler) located in Chuluota, surrendered Thursday on charges of knowingly omitting or concealing material information for the purpose of avoiding, delaying, or diminishing the amount of workers’ compensation premiums due. The charges stem from an investigation led by Det. Greg Whipple of the Department of Financial Services, Division of Insurance Fraud (DIF).

“We are determined to ensure that employers comply with the law and that appropriate action is taken against those who do not,” said Gallagher, who oversees the department. “Compliance is critical for the welfare of our workforce and the economy of this state.”

Arrests and other compliance efforts by the department, along with laws passed in 2003 that created tougher penalties for workers’ compensation fraud, have pushed workers’ compensation premiums down more than 30 percent. A fourth drop of 13.3 percent is pending.

Zeigler’s employee died in April 2005 from injuries sustained from the fall. Fraud detectives discovered that the deceased was never reported as an employee to Bridgefield Insurance, Zeigler’s worker’s compensation carrier.

At a job site at Shingle Creek in Orlando, detectives interviewed about 20 employees who reported they had been working for Zeigler anywhere from three months to six years. An audit dated May 18, 2005, revealed that several of the employees, including the deceased, had been reported to Bridgefield Insurance as subcontractors rather than employees. The payroll Zeigler reported during the audit was $331,207. Almost three weeks later, Bridgefield was informed that not all payroll had been reported and a second audit was conducted. The revised audit revealed a $983,038 payroll.

Had this difference in payroll not been detected, Zeigler would have avoided nearly $100,000 in workers’ compensation insurance premiums. Zeigler was booked into the Orange County Jail. The charges are being prosecuted by the Office of Statewide Prosecution.

In another case, detectives with the Orlando DIF office arrested Larry Alvin Jackson Sr., 67, owner of Jaxon Painting, Inc., for presenting fictitious certificates of insurance to a Jacksonville-area construction company that hired Jackson’s company as a painting subcontractor for central Florida area projects.

DIF’s investigation, led by Det. Neil McDonald, revealed that Jackson did not have the workers’ compensation insurance coverage he claimed to have on the fictitious certificates, and that he obtained the insurance certificate of an unrelated innocent company and allegedly used that company’s legitimate policy references to create a fictitious certificate for his own company.

Jackson surrendered on the charges on Sept. 29 and was booked into the Orange County Jail. The charges are being prosecuted in Orange County by the State Attorney's Office, 9th Judicial Circuit of Florida.

In a third case, DIF detectives arrested Norberto Legarreta, 54, on Sept. 25 on charges of workers’ compensation claim fraud and perjury.

Legarreta, of Deltona, allegedly failed to disclose that he had been receiving ongoing chiropractic care for previous back and leg pain for nearly 15 years and denied receiving chiropractic care given just days before a 2004 workers' compensation injury. Detectives said Legarreta also concealed the fact that the Social Security Administration listed him as disabled and paid him disability benefits from 1991 to 2000 due to his back problems.

Detectives said he also denied being a little league umpire, which was caught on video and in records showing that he worked the 2005 and 2006 little league seasons and earned almost $1,000. FCCI Insurance Group (FCCI) and the Professional Business Owners Association (PBOA) paid him almost $65,000.

Legarreta was booked into the Seminole County Jail. The charges are being prosecuted in Seminole County by the State Attorney's Office, 18th Judicial Circuit of Florida. Detective Kurt Harmon was DIF’s case investigator.

The Department of Financial Services, Division of Insurance Fraud, investigates various forms of fraud in insurance, including health, life, auto, property and workers' compensation insurance. Anyone with information about this case is asked to call the department's Fraud Fighters Hotline at 1-800-378-0445. A reward of up to $25,000 may be offered for information leading to an arrest and conviction.