main menu page title feature menus content footer
My Florida C F O

CFO's Initiatives

Stay Connected

Follow the
Department of
Financial Services

Sign up for the CFO's
weekly newsletter!

Press Release

News   RSS RSS   Press Office   Archive

Central Florida Man Convicted of Fraud Scheme Ordered to Pay More Than $1 Million in Restitution

9/5/2017

For Immediate Release:
September 5, 2017
 
Contact: Ashley Carr
(850) 413–2842
FORT MYERS, Fla. – Chief Financial Officer Jimmy Patronis and the Department of Financial Services (DFS) today announced the recent conviction of Ivan Alberto Hernandez-Madrigal (Hernandez) following an in-depth investigation into Hernandez’s attempt to fraudulently provide his company’s clients, which consisted of various construction industry employers, with workers’ compensation insurance in return for a fee. In addition, Hernandez was found to have performed various payroll services for those clients where he withheld and pocketed thousands of dollars in state and federal payroll taxes.
 
DFS’ Division of Investigative and Forensic Services (DIFS) found Hernandez obtained a minimal workers’ compensation policy for his company, Global Staffing Service, LLC., a staffing company that he reported would recruit employees for various construction companies across Florida. Hernandez listed that he employed two individuals with an estimated annual payroll of $51,000. Shortly after, Hernandez changed the name of Global Staffing Services, LLC., to Professional Staffing and Payroll Services (PSPS), in March 2015 but he did not change the company’s reported activities and previously obtained workers’ compensation policy.
 
DIFS’ investigation revealed that instead of acting as a recruiting company, Hernandez and PSPS engaged in numerous client agreements by fraudulently claiming to provide workers’ compensation coverage to multiple construction industry employers in return for a fee. In addition, Hernandez agreed to provide payroll services to these clients and oversee the withholding and reporting of state and federal taxes from PSPS client’s payroll. By doing so, Hernandez operated PSPS as an unlicensed employee leasing company with no workers’ compensation insurance policy in place for his clients.
 
To add, various employers using PSPS’ minimal workers’ compensation policy had employees that suffered from work-related injuries. Hernandez failed to report the injury claims to the insurance company but would instead pay the medical bills out of PSPS’ bank account or he would deny the high-dollar claims himself. By Hernandez not reporting these workers’ compensation claims, as mandated by law, the injured employees were left with thousands of dollars in medical debt.
 
The investigation went on to reveal Hernandez pocketed the federal and state tax withholdings retained from the employee paychecks instead of reporting the funds to the appropriate government branches.
 
As a result of his actions, Hernandez defrauded the client companies of approximately $1,035,662.00.
 
Earlier this month, Hernandez pled no contest to RICO, aggravated white collar crime, money laundering, scheme to defraud, uttering a forged instrument and violating a stop work order.
 
Hernandez was sentenced to 10 years in prison followed by 30 years of probation and was ordered to pay $1,034,662.00 in restitution. This case was prosecuted by the Fort Myers Office of Assistant State Attorney J.D. Miller, 20th Judicial Circuit.
 
###