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Construction Company Operators Charged with Fraud

3/28/2001

TALLAHASSEE – Florida Treasurer and Insurance Commissioner Tom Gallagher and Statewide Prosecutor Melanie Ann Hines announced today that three South Florida residents associated with four affiliated construction companies have been charged with defrauding insurance companies out of more than $2.7 million in workers' compensation premiums.

William Johnson, 59; Debra Coe Carman, 44; and Tina Dowell, 42, surrendered this afternoon to Department of Insurance fraud investigators at the Dade County Jail. Each is charged with organized scheme to defraud and workers' compensation fraud, which carries a penalty of up to 30 years in prison and a $15,000 fine.

Today's arrests stem from a year-long investigation involving the Department of Insurance's Division of Insurance Fraud and the Office of Statewide Prosecution, which will prosecute the case.

In the past week, Department of Insurance fraud investigators arrested the owner of two other Miami construction companies and his chief financial officer on similar charges for allegedly hiding payroll to avoid more than $830,000 in workers' compensation premiums.

"The department takes fraud very seriously and will prosecute all violators," Gallagher said. "In addition to raising the cost of premiums, insurance fraud puts those who operate legitimately at a disadvantage. The honest businessman has a harder time outbidding the dishonest businessman for jobs."

Johnson, of Miami; Carman, of Miami Beach; and Dowell, of Pembroke Pines, allegedly collaborated to misclassify more than 100 construction workers as janitorial workers to avoid more than $2.7 million in premiums from December 1995 through October 2000.

The workers were employed by Pinnacle Enterprises, Inc.; Armstrong Plastering and Drywall, Inc.; Johnson Cleaning Service, Inc.; and Bridge Cleaning Service, Inc., all located at 10700 N.W. 6th Ct. in Miami.

Investigators said Johnson, the owner of Johnson Cleaning, first initiated the deception by filing a fraudulent workers' compensation insurance application with FCCI Insurance Group stating his employees performed commercial janitorial work. Carman, vice president of Pinnacle Enterprises, and Dowell, a former bookkeeper for Armstrong Plastering and Drywall and Johnson Cleaning, allegedly continued the deception when questioned by FCCI insurance auditors.

Later, Carman and Johnson applied for workers' compensation insurance from AmComp/Preferred Insurance Company for a new company, Bridge Cleaning Service, Inc., which they also described as a commercial janitorial company. Investigators said they then dissolved Johnson Cleaning, transferred the employees to Bridge Cleaning's payroll and obtained an even better premium because the brand-new company had no prior claims to factor into its premium cost.

Several employees who were interviewed stated that they were hired by and worked for Pinnacle Enterprises, Inc., or Armstrong Plastering and Drywall, Inc., but that their paychecks came from Johnson Cleaning and then from Bridge Cleaning.

The Department of Insurance, 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 or another possible fraud scheme should call the department's Fraud Hotline at 1-800-378-0445. A reward of up to $25,000 is offered for information leading to a conviction.