Milford Business Owners Ordered to Pay Restitution in Insurance Fraud Case

Two Milford business owners accused of workers’ compensation insurance fraud and larceny were ordered to pay $100,000 in restitution to two insurance companies.

On Wednesday, Segundo N. Cungachi, 31 and Maria Alegria Morocho Munoz, 29, both of Milford, were placed on pretrial probation until Jan. 3, 2019, according to the Worcester Telegram & Gazette. In addition do the restitution, the charges were continued without pleas or findings.

In May, the Cungachi was charged five counts of with workers’ compensation fraud and two counts of larceny over $250. Munoz was charged with two counts of workers compensation fraud two counts of larceny over $250.

According to the Attorney General’s office, Cungachi and Morocho formed three Milford area roofing companies between 2008 and 2014: Byron Construction in 2008, Nationwide Construction Corporation in 2010, and First Nationwide Construction Corporation in 2012. Each company was allegedly insured for workers’ compensation and were each assigned premiums based on their reporting.

Authorities allege that based on their reporting, Cungachi and Morocho were granted lower premium rates on their company policies. As a result of this alleged scheme, Cungachi and Morocho put the insurance companies unknowingly at risk to cover any undisclosed employees for injuries that occurred or may have occurred during the policy periods and avoided paying more than $615,000 in insurance premiums.

According to the restitution order, Liberty Mutual Insurance Co. will receive $67,000 and A.I.M. Mutual Insurance Companies is set to receive $33,000.

As part of the restitution, two checks totaling $30,000 have been paid by the defendants, with the remaining $70,000 to be paid quarterly at a rate of $6,000 per quarter starting on Jan. 1. If the total is paid in full before Jan. 3, 2019, Assistant Attorney General Geoffrey Wood said in court he would move to terminate the defendants’ probation.