Delray Beach Roofing Company Owner Convicted of Workers’ Compensation Fraud
Jul 29, 2009
Florida Chief Financial Officer Alex Sink announced the conviction of Robert McDonald, owner and operator of Gulfstream Roofing, Inc. in Delray Beach, on charges of workers’ compensation premium fraud today, July 29, 2009. His initial arrest in November 2008 came as a result of a Florida Department of Financial Services (“DFS”) check-cashing store investigation.
A DFS press release on the conviction is reprinted below.
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Roofing Company Owner Convicted of Workers’ Comp Fraud
Initial Arrest Part of CFO Sink’s Check-Cashing Store Investigation
TALLAHASSEE – Florida CFO Alex Sink today announced the conviction of Robert McDonald, owner of a well-known roofing company, on chargers of Workers’ Compensation Premium Fraud. McDonald, the owner and operator of Gulfstream Roofing, Inc. in Delray Beach, was found guilty of using fake construction companies to avoid paying $400,000 in workers’ compensation premiums.
“The outcome of Mr. McDonald’s case shows those dishonest people attempting to scam the system that this crime does not pay,” said CFO Sink. “Mr. McDonald and those like him who try to avoid workers’ comp premiums are leaving their workers unprotected and putting them at risk. I commend the work of our dedicated investigators in the Division of Insurance Fraud, including lead investigator Deborah de la Paz-Boxer, who put a stop to this scam.”
CFO Sink’s Division of Insurance Fraud (DIF) first became suspicious of Gulfstream Roofing, Inc. while investigating another check cashing scheme. After DIF began pursuing Gulfstream Roofing, Inc., investigators determined that from 2002 to 2006, Gulfstream Roofing, Inc. moved almost $3 million in payroll through various fake construction companies, under the guise that it was being paid to insured subcontractors.
The checks were cashed at various check-cashing stores throughout Broward and Palm Beach Counties and then delivered back to Gulfstream to pay its employees. As a result, none of the payments made to the fake contracting companies were assessed any workers’ compensation insurance premiums, resulting in more than $400,000 in underpaid premiums during the four-year period.
McDonald was arrested on November 22, 2008 by DIF detectives.
On July 24, 2009, McDonald pled guilty to the charge of Workers’ Compensation Fraud. He was sentenced to five years probation and ordered to pay over $400,000 in restitution to the Bridgefield Insurance Company, over $6,000 in investigative costs to DIF, and approximately $500 in court costs.
As part of his 300 hours in required community service, McDonald was also ordered to make presentations to various groups and organizations regarding to the risks surrounding Workers’ Compensation Fraud, as requested by DIF.
CFO Sink’s Division of Insurance Fraud is currently investigating similar schemes throughout the state. Anyone with information about Workers’ Comp or any other type of suspected insurance fraud is asked to call the Department’s Fraud Fighters Hotline at 1-800-378-0445 or log on to www.MyFloridaCFO.com/fraud.
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