Houston Firm Pleads Guilty to WC Fraud

October 16, 2003

A Houston landscaping company recently entered a plea of guilty to workers’ compensation fraud charges before the 131st Travis County District Court. According to Texas Mutual Insurance Company, the court subsequently ordered the company to pay $325,000 in restitution to Texas Mutual.

An investigation by Texas Mutual uncovered evidence that the landscaping company intentionally hid its overtime and extra compensation in a second company, Dynamic Metro Services Inc., which was allegedly a company in name only. Since workers’ compensation premiums are based in part on payroll, the scam enabled the landscaping company to unfairly lower its premium.

Texas Mutual began its investigation after one of the landscaping company’s employees disputed his temporary income benefits, which are based in part on income. The employee claimed he made more money than his employer had reported.

The investigation was part of the Texas Mutual Zero Tolerance for Fraud program.

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