Workers Comp Fraud Charges Leads To Guilty Plea By Contractor

TAMPA, FL — The 24-year-old owner of a Tampa construction company has pleaded guilty to one count of conspiracy to commit wire fraud by making false claims about paying worker's compensation for employees and employing undocumented immigrants.

George Garcia of Tampa faces a maximum penalty of 20 years in federal prison. A sentencing date has not yet been set.

According to the plea agreement, Garcia owned and managed a construction company that he had registered with the state of Florida in October 2018. This company supplied construction services and labor for construction site contractors. To comply with Florida law, Garcia’s company was required to secure and maintain adequate worker’s compensation insurance coverage.

Providers of worker’s compensation insurance base the premiums they charge and the amount of coverage they provide on the number of employees a company has and the total annual payroll of those employees.

Garcia’s company had agreements with contractors and subcontractors to use his workers at construction sites, but these workers were often undocumented immigrants who were working for and under the daily supervision and direction of the contractors, the affidavit said. Garcia or others regularly received “payroll checks” from contractors that were cashed at various financial institutions to pay Garcia’s purported “employees” and other related expenses.

The affidavit said Garcia falsely represented in insurance applications that his company had a very limited payroll and a very limited number of employees who worked on construction sites. Garcia also sent wire communications to numerous contractors falsely stating that his company’s employees had full worker’s compensation coverage.

In reality, Garcia’s company received and cashed more than $19 million in checks from various construction contractors for these purported “employees." This payroll figure far exceeded the very limited payroll figures that Garcia had reported to his worker’s compensation insurance company.

As a result, the employees of Garcia’s company performed work on job sites without adequate insurance coverage. In addition, the insurers lost premiums that they would have charged had they been aware of the true number of workers their policies were manipulated to cover.

Garcia’s company also denied responsibility for ensuring that job site workers were legally authorized to work in the United States, and that the required state and federal payroll taxes were being paid for these workers. The contractors who actually paid these workers’ wages and used their services were, therefore, able to avoid those taxes.

This case was investigated by Homeland Security Investigations and the Florida Department of Financial Services. It is being prosecuted by Assistant United States Attorney Jay L. Hoffer.