Fla. Charges 2 Insurance Brokers, 1 Other in Major Workers’ Comp Fraud

February 9, 2007

Three Floridians including two insurance brokers have been charged with fraud and conspiracy for allegedly providing hundreds of workers with falsified workers’ compensation insurance certificates to more than 300 Florida construction contractors.

A 21-count federal grand jury indictment names two employees at South Florida insurance brokerages and a Broward County accountant in a scheme that involved about $20 million in construction contracts in 12 counties.

Hospitals, housing developments and condominium towers were among the jobs involved over a two-year period. U.S. Labor Department investigators said this was the first such worker’s compensation fraud case ever brought in Florida.

“We are seeing this type of activity throughout South Florida and the state of Florida,” said Jeff Himmel, assistant special agent in charge of labor racketeering and fraud investigations in South Florida for the Labor Department.

The three people charged in the indictment and a fourth named as an unindicted co-conspirator were able to undercut other area labor providers because they didn’t pay an estimated $4 million in workers’ compensation insurance costs, said Miami U.S. Attorney R. Alexander Acosta.

“The result is that the honest business cannot compete,” Acosta said. “I very much hope that this is not a single case, but the first in a series of cases.”

The scheme also means that hundreds of workers were not covered by required insurance in an exceptionally dangerous industry where people are often injured or even killed, Acosta said.

All three defendants are charged with mail fraud and conspiracy. They are Enrique Guevara, owner of a Broward County accounting business; Erick Brandon, employee at a Hialeah insurance brokerage; and Alexandra Cordero, who owns a Coral Springs insurance firm.

Guevara was also charged with federal tax law violations.

A mail fraud conviction carries a potential 20-year prison sentence, with the maximum penalties for the tax counts ranging from three to five years behind bars.

Attorneys for Cordero and Guevara said they would plead not guilty at an arraignment scheduled for Feb. 22. At a brief initial hearing Wednesday, a judge ordered Guevara released on $200,000 bail and Cordero on $100,000 bail.

Prosecutors said Brandon was not yet under arrest Wednesday afternoon, but it was unclear if he was considered a fugitive.

The fourth person named but not charged in the indictment is Marco Sandi, owner of Sandi Construction Co. in Coral Springs. The indictment says that it was Sandi who obtained hundreds of false insurance certificates and provided them to contractors, while actually providing coverage to only six Sandi employees.

According to court papers, Brandon and Cordero helped Sandi issue the certificates appearing to verify that all the workers were covered, when they were not. Guevara allegedly created fake payroll records, paychecks and IRS reporting documents to conceal how many employees were actually working.

Acosta said Sandi Construction has been shut down and that it remained possible charges will be brought against Marco Sandi. A telephone call to Sandi Construction was met with a recording saying that the number had been disconnected.

“Without getting into specifics, wait and see,” Acosta said. “We don’t believe in giving individuals free rides.”

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