Federal officials reported that a roofing company in Shelby Township recently entered a guilty plea to charges of health care and mail fraud. The white-collar crimes to which the company leaders pleaded guilty included defrauding the Michigan Unemployment Insurance Agency and the workers' compensation insurance fund. A U.S. Attorney alleged the defendant committed these crimes to gain an unfair advantage over competing businesses.
In relation to the UIA, the company apparently enabled employees to claim unemployment compensation for periods of time during which they were working, while the defendant falsely verified that they had been unemployed. It is alleged that the defendant allowed workers to bank hours by not paying them for additional hours worked until the number of hours reached 40. At that time, the company would pay them for one week and declare to the agency that the workers had worked for only that one week. Court documents stated that this scheme defrauded the UIA of over $104,000.
Furthermore, court documents show that the workers' compensation insurance fund was defrauded by the defendant who convinced some of his employees not to claim workers' compensation benefits for workplace injuries but rather claim benefits through their personal health insurance coverage. Between 2008 and 2010, the respective health plans of workers paid out more than $70,000 in benefits. Court documents state that this was done to keep insurance premiums low and to allow the company to bid on high-value contracts as a company with a favorable incident rating.
Sentencing will take place in March of 2016. The Michigan business will likely face heavy fines, organizational probation, and restitution. While the expected penalties sound harsh, it is likely that the company's defense counsel helped company leaders to make the decision to plead guilty to the white-collar crimes, as such a plea may have offered lighter penalties than the company would otherwise face.
Source: macombdaily.com, "Roofing company pleads guilty to fraud", Nov. 3, 2015