Sunday, January 18, 2009

Seven people, 11 corporations charged in multi-million dollar fraud case - - 13 Jan 09

New Jersey officials have charged seven people and 11 corporations for their alleged roles in a pair of workers’ compensation scams that netted as much as $1.5 million for the defendants.

In a pair of recent indictments, the defendants are accused of lying on insurance applications and failing to remit insurance premiums to the insurance companies, instead keeping the money for themselves, according to the New Jersey Attorney General’s Office. The defendants are also accused of laundering money so the scheme would go undetected. As a result, many people were allegedly left without workers compensation insurance.

Named in one indictment, according to officials, are New Jersey residents Justin Sciarra, 59; Paul Brown, 43; Michael Magee, 34; James Maconaghy,41; and William Griffith, 53 of Reading, Pa. Brown, Maconaghy and Griffin are all currently licensed insurance brokers.

Four corporations are also named in the indictment: Q-Town, Inc., TJAX Investment Corp., Bay Enterprises, Inc. and 3D Assurance Brokerage, LLC. All the companies were owned and/or operated by the defendants with the exception of Griffith.

These defendants face multiple second-degree charges of conspiracy, racketeering, insurance fraud, theft by failure to make required disposition of property received and fourth-degree worker’s compensation insurance fraud.

The indictment alleges that as a result of the misrepresentations, the defendants committed insurance fraud by avoiding payment of $304,244 in workers’ compensation insurance premiums. The defendants are also charged with misappropriating as much as $745,207 from clients by failing to remit the money to the insurance companies.

A second state grand jury indictment returned on June 20, 2007 but recently unsealed charges Sciarra, Brown, and Paul Hopkins, 58, of Marlton, N.J. with conspiracy to commit racketeering, racketeering, conspiracy, theft by failure to make required disposition of property received, theft of services, misconduct by a corporate official and financial facilitation of criminal activity.

Sciarra and Brown were additionally charged with workers’ compensation insurance fraud, and Sciarra alone was charged with failure to carry workers’ compensation insurance. Hopkins’s wife, Adrienne Hopkins, 48, of Marlton, N.J. was charged with conspiracy to commit racketeering, racketeering, conspiracy, misconduct by a corporate official, and financial facilitation of criminal activity.

Eight corporations were charged in the second indictment, including Sciarra Insurance Agency; AJAX Enterprises, a.k.a. AJAX Leasing, Inc.; and AJEX Enterprises, Inc.

The unsealed indictment alleges that Sciarra, Brown, and the Hopkinses fraudulently obtained workers’ compensation insurance through the companies over six years, and allegedly falsified workers’ compensation insurance applications, evaded payment of premiums, and failed to remit money to insurers, which had been provided by clients to pay for insurance premiums.

The defendants also allegedly engaged in money laundering to conceal as much as $500,000 of the proceeds obtained from those alleged criminal activities, prosecutors said.

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