Jacksonville Man Nabbed in Multi-Million Dollar Fraud Scheme; Charged in 23 Count Indictment

March 1, 2005

United States Attorney Paul Perez, Robert Cromwell, Special Agent in Charge of the Federal Bureau of Investigation (FBI) and Tom Gallagher, Florida’s Chief Financial Officer, recently announced the unsealing of an indictment charging a local Jacksonville businessman with insurance fraud related offenses.

The defendant, Thomas D. King, is charged in a 23 count indictment with mail fraud, wire fraud, and money laundering charges. King, age 41, is a resident of Jacksonville, Florida, and the former owner and operator of Miralink Group Inc. (Miralink). King was arrested late last month.

According to the indictment, Miralink, was headquartered in Jacksonville, Florida, and operated as a professional employee organization (PEO) to client companies in the State of Florida and several other states.

PEOs, commonly referred to as employee leasing businesses, employ workers who are then leased to other businesses (“client companies”). PEOs are required to secure workers’ compensation insurance (WCI) for the employees leased to their client companies and that PEOs collect payments from their client companies which are used to pay the cost of WCI premiums.

The indictment further alleges that Miralink represented to its client companies that the client companies’ employees were covered with WCI through an alleged insurance company identified as Regency Insurance of the West Indies Ltd (Regency).

It is alleged that Regency was a name used for a purported insurance company which provided sham workers’ comp insurance coverage. Regency was located in Capistrano Beach, California, and was reportedly not authorized by any state in the United States to provide workers’ comp insurance.

The State of Florida requires employers to secure workers’ comp insurance (WCI) for the benefit and protection of employees.

WCI is designed to pay various medical expenses, lost wages, and other benefits for employees injured or killed while on the job. To lawfully provide WCI coverage (write WCI policies) in the State of Florida, insurance companies must obtain a Certificate of Authority (COA) from the State.

The indictment alleges that Regency never applied for or was issued a COA to write WCI in the State of Florida.

The indictment alleges that between February 2002, through June 25, 2002, King executed a scheme to defraud Miralink’s client companies by using Regency as Miralink’s WCI carrier, knowing that Regency did not have the lawful authority to write or provide WCI in the State of Florida, and that it was illegal to do so.

It is further alleged that King, acting by and through Miralink, defrauded Miralink’s client companies into paying workers’ comp insurance premiums for illegal, fraudulent, and unauthorized workers’
comp insurance and thereby collected $5.8 million in WCI premiums.

According to the indictment, King defrauded Miralink’s client companies by falsely and fraudulently representing to the client companies that the employees leased to the client companies’ were covered by a legitimate workers’ comp insurance carrier, when, in fact, they were not.

King, if convicted of all 23 counts, faces a maximum penalty of 160 years’ imprisonment and a fine of more than $5.7 million. Additionally, the indictment seeks the forfeiture of a sum of money equal to $1.2 million, and amongst other items, a Chevrolet Hummer sport utility vehicle, a 3.01 carat diamond and real estate.

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