Workers’ Comp Fraud Scheme Costs Texas Business $149K

Texas Mutual Insurance Company reported today that Granbury Contracting & Utilities, Inc. of Granbury, Texas pled guilty to workers’ compensation fraud-related charges. A Travis County district court ordered the company to pay $149,000 in restitution to Texas Mutual.

Granbury Contracting & Utilities, Inc., owned by Wayne Wienecke, obtained workers’ compensation coverage through Texas Mutual from November 2003 to April 2008. During that time, Granbury Contracting & Utilities, Inc. misrepresented numbers of employees and payroll to Texas Mutual.

Because workers’ compensation insurance premium is based, in part, on payroll, this type of scheme results in an employer being charged a lower premium than it actually owes. By hiding payroll, an employer can gain an unfair advantage over competitors.

Premium Fraud Indictments

A Travis County grand jury recently indicted Premrock Commercial Drywall Ltd. Co., Timothy Castonguay of Arlington and Carlos Aguilar of Ft. Worth on workers’ compensation fraud-related charges.

Castonguay and Aguilar own and operate Premrock Commercial Drywall Ltd. Co., a Dallas- area drywall contractor. The indictments allege that the individuals intentionally misrepresented the payroll of Premrock Commercial Drywall Ltd. Co. between December 26, 2006, and May 14, 2007. The misrepresentation allowed the company to fraudulently obtain lower premiums from Texas Mutual.

Workers’ compensation insurance premium is based, in part, on payroll. An employer who intentionally underreports payroll is charged a lower premium than it actually owes. By fraudulently concealing or underreporting payroll, an employer gains an unfair advantage over competitors.

If you’re interested in learning more about the fight against workers’ comp fraud, visit the Fighting Fraud section of our website.  It includes fraud articles, red flags for fraud and copies of our FraudStoppers posters in English and Spanish.

Note: A grand jury indictment is a formal accusation, not a conviction, of criminal conduct.

Recent Premium Fraud Conviction

A Travis County district court recently sentenced Ellynn A. Ogilvie of Houston to five years of probation, 450 community service hours and a $2,000 fine for workers’ compensation fraud-related charges.

Ogilvie, who owned United Crane, Inc. and multiple related companies, was indicted in March 2009 for her role in concealing payroll and employees from Texas Mutual Insurance Company from August 16, 2001 to October 11, 2004.

Because workers’ compensation insurance premium is based, in part, on payroll, this type of scheme results in an employer being charged a lower premium than it actually owes. By hiding payroll, an employer can gain an unfair advantage over competitors.

Texas Mutual previously reported that Gary C. Quintinsky, who was also a participant in the scheme, was sentenced in March and received a two-year prison term for his role.

In 2007, a Travis County jury awarded Texas Mutual more than $5 million in actual damages and $2.5 million in punitive damages in a civil judgment against Quintinsky. The case was the largest premium fraud case in Texas Mutual’s history.