Malden Business Owner Gets Jail Time For Insurance Fraud

MALDEN, MA — The owner of a Malden-based cleaning company was sentenced to jail in after pleading guilty to an insurance fraud scheme, according to Attorney General Maura Healey's office. Marcello Pompa, 41, of Saugus, falsely claimed that he used three sub-contractors through his company, M&M Cleaning, Inc., in order to lower his workers' compensation insurance premiums, authorities said.

Pompa ran the scam from 2010-2016, concealing more than $2.8 million in M&M's payroll and evading more than $74,000 in workers' compensation insurance premiums, according to the AG. He was able to win several contracts, including municipal contracts throughout Massachusetts, by offering a substantially lower price for cleaning services than his competitors during the bidding process.

Pompa was indicted in October 2018 and pleaded guilty Monday to five counts of workers compensation insurance fraud and five counts of larceny over $250. He was sentenced to one year in a House of Correction with six months to be served and the remaining balance suspended for two years. He was ordered to pay $74,000 in restitution and is barred from working or bidding on municipal contracts for two years.

"Worker misclassification is a serious issue that cheats our state out of needed resources," Attorney General Maura Healey said in a statement. "Employers need to follow the law and pay their fair share."