A New York contractor has been charged with defrauding the New York State Insurance Fund of nearly $3 million by underreporting employee wages to reduce his amount of required state insurance premiums.
Manhattan District Attorney Alvin L. Bragg Jr. announced Thursday the charges against Juan Escobar, 46, and his plastering and carpentry companies — Infinity Drywall Corp., Infinity Quality Services Inc., JMC Drywall Corp. and JJM Buildings Inc.
The defendants were indicted on felony charges of conspiracy, insurance fraud and falsifying business records.
According to the authorities, Mr. Escobar issued cashier’s checks to shell companies in the names of family members that were made to appear as legitimate payments to subcontractors for construction work, and the proceeds were transferred to a public payroll, often to the tune of $50,000 a week.
Prosecutors said Escobar ordered injured workers to falsely claim their injuries did not occur on jobsites, and he instructed workers to avoid safety inspectors or gave them cash if they agreed not to file workers̵7; compensation claims.
Mr. Escobar is also accused of failing to report work injuries to the New York State Insurance Fund and allegedly misrepresenting a worker’s employment status if a claim was ultimately filed.
Prosecutors said the measures left workers on major construction projects underinsured and unprotected.
The State Insurance Fund provides workers’ compensation and disability benefits to New York employers.
The DA’s office said Escobar cashed more than $26 million in checks at locations in Manhattan and Queens during the alleged scheme, which is said to have taken place between November 2013 and October 2021.
The money must have been used to finance the companies’ unreported wages.