12/22/2009

News / Orlando businessman sentenced in unauthorized workers compensation scheme

ORLANDO, Fla. - An Orlando man was sentenced to federal prison on Dec. 18 for his involvement in a scheme to rent workers' compensation certificates to crews of illegal alien workers following an investigation by U.S. Immigration and Customs Enforcement (ICE).

Jose Corcho, 32, was sentenced Friday to three years and five months in federal prison for wire fraud in connection with a scheme to rent a fraudulently obtained workers' compensation insurance certificate to crews of illegal aliens or unauthorized workers. The court also ordered Corcho to pay restitution in the amount of $407,693. Corcho had pleaded guilty on Aug. 19.

Corcho created a corporation called Durable Enterprise, and obtained Certificate of Liability Insurance from an insurance company that certified that Durable Enterprise carried workers' compensation insurance. Once Corcho obtained the Certificate of Liability Insurance, he would rent Durable Enterprise's Certificate of Liability Insurance to construction subcontractors that he knew were composed of crews of illegal alien workers. The crews of illegal alien workers needed the Certificate of Liability Insurance to appear legitimate and, thus, be able to bid on, perform, and ultimately be paid for, construction work in Florida and in other states in the name of Durable Enterprise.

The subcontractors were composed of illegal aliens and unauthorized workers and did not deduct state unemployment taxes and federal employment taxes such as Medicare and Social Security from their paychecks and were able to underbid companies that properly deducted those taxes. Furthermore, the insurer that issued the Certificate of Liability Insurance was defrauded because it unwittingly provided coverage for the hundreds of workers employed by the subcontractors for a premium based on coverage for only the one worker allegedly employed by Durable Enterprise.

Durable Enterprise notified its insurer that it had only one employee who would earn $15,000 annually, but actually cashed payroll checks in excess of $8 million from January 2007 through November 2008. As a result of Corcho's fraud, Durable Enterprise avoided the payment of $407,693 in workers compensation insurance premiums, which Corcho must now pay as restitution to the defrauded insurance company.

Corcho also negotiated the payroll checks made out to Durable Enterprise for work performed by the subcontractors. As payment for his activities, Corcho would take a percentage of the subcontractors' payroll check - typically an amount between five and eight percent. The cash payments from Corcho helped the subcontractors conceal their employment of illegal laborers and avoid paying unemployment taxes, and thus underbid legitimate, law-abiding construction companies.

http://www.ice.gov/pi/nr/0912/091218orlando.htm

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