Insurer sues real estate firm for workers' comp fraud

Company alleged to have avoided nearly $1.5 million in premiums

Insurer sues real estate firm for workers' comp fraud

Workers Comp

By Ryan Smith

An insurance company is suing a New York real estate firm for allegedly ducking nearly $1.5 million in workers’ compensation premiums.

Charter Oak Fire Insurance Co. said in a lawsuit that Alpha Omega Realty in Rockland County, N.Y., applied for workers’ compensation insurance for just one employee in 2016, while actually employing more than 90 people, according to a report by The Westchester & Fairfield County Business Journals.

Charter Oak is suing Alpha Omega and its owner, Anthony Frascone, in US District Court and is demanding payment of the allegedly unpaid premiums.

Frascone and Alpha Omega “knew the representations were false” when they claimed only one employee, and made them “with the intent of fraudulently inducing Charter Oak to issue its policy of insurance at a reduced and inaccurate premium amount,” the insurance company said in a court filing.

The lawsuit follows a January indictment filed by Rockland District Attorney Thomas Walsh accusing Frascone of grand larceny and insurance fraud, the Business Journals reported.

Charter Oak said it issued a workers’ compensation and employee liability policy for November 2016 to November 2017 covering Alpha Omega Realty and Alpha Omega Consulting Corp. The policy premium was based on an applicant’s “actual exposure,” the nature of the work and the number of workers, according to Charter Oak’s complaint. Based on a payroll of $40,000 for just one employee, the annual premium was $403, the Business Journals reported.

However, the Alpha Omega companies were general contractors for New York state construction projects and employed more than 90 people, according to the complaint. That being the case, the companies should have paid nearly $1.5 million for the coverage.

Charter Oak has accused the company of breach of contract and fraud, and is demanding restitution for the value of the coverage provided, the Business Journals reported.

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