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MSB Working Group 8/25/2011 Money Service Business Facilitated Workers’ Compensation Premium Fraud Geoffrey R. Branch

MSB Working Group 8/25/2011 Money Service Business Facilitated Workers’ Compensation Premium Fraud Geoffrey R. Branch Florida Division of Insurance Fraud. The Scheme.

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MSB Working Group 8/25/2011 Money Service Business Facilitated Workers’ Compensation Premium Fraud Geoffrey R. Branch

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  1. MSB Working Group 8/25/2011 Money Service Business Facilitated Workers’ Compensation Premium Fraud Geoffrey R. Branch Florida Division of Insurance Fraud

  2. The Scheme • A shell company is set up and incorporated and then a minimal workers’ compensation insurance policy is obtained. The company paperwork is then made available for anyone who wishes to use it to work for a general contractor (GC). The GC writes a check to the shell company, which is negotiated at an MSB where a fee is taken out for both the MSB AND the use of the shell company name and Workers’ Compensation insurance policy.

  3. Currency Transaction Reports

  4. CTR’s Totaling 1 Billion Dollars • $124,000,000.00 in FICA was not paid, FICA is commonly known as social security taxes paid 50/50 by the employee and employer. This is enough money to pay a retired person $1,500.00 per month for 6,888 years. • $29,000,000.00 in Medicare taxes (again 50/50 between employee and employer) enough to pay for 386,666 Dr. office visits at $75.00 per visit. • $27,000,000.00 in State Unemployment taxes, • $8,000,000.00 in Federal Unemployment taxes, •  $50,000,000.00 in Federal Income Taxes (assuming that the average worker would pay 5% of income, and that is low.) • $200,000,000.00 in WC premiums if you assume that these employees worked at jobs that had 20% comp rates, (like concrete construction) • All of the above totals up to:$438,000,000.00 not including all of the other items such as unpaid hospital bills etc.

  5. Powertech Interiors, Inc. • Chief Executive Officer Mario Turcotte • History • Scope and Magnitude of the Problem • Suggestions and Solutions

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