Man Sentenced to Three Years in Prison, for Bilking Insurance Carrier out of Nearly $600,000 in Workers’ Compensation
Man Sentenced to Three Years in Prison, for Bilking Insurance Carrier out of Nearly $600,000 in Workers’ Compensation :
The Attorney General and the Office of the Insurance Fraud Prosecutor (OIFP) announced that the owner of an electronic recycling company was sentenced to three years in prison, and his company was fined $100,000, for defrauding an insurance carrier out of nearly $600,000 in workers’ compensation coverage by lying about the kind of work their employees did.
Albert Boufarah, 50, of Toms River, and his company Supreme Asset Management Recovery (SAMR), in Lakewood, are also jointly and severally liable for restitution to the insurance company, under the sentence handed down by Superior Court Judge Wendel E. Daniels in Ocean County.
“For these defendants, lying to their insurance carrier to save money on premiums turned out to be very costly,” said Attorney General Porrino. “The sentence imposed on them should act as a deterrent to others tempted to cut business costs by breaking the law.”
Boufarah and SAMR pleaded guilty last fall to second-degree conspiracy and insurance fraud. The defendants admitted conspiring with officials at SAMR and a Neptune insurance agency, The Amato Agency, LLC, to misclassify SAMR’s warehouse workers as office staff on insurance applications in order to obtain much lower premiums for workers’ compensation coverage.
“Employers who manipulate the insurance system to avoid paying their fair share drive up insurance costs for everyone and put honest businesses at a competitive disadvantage,” said Acting Insurance Fraud Prosecutor Christopher Iu. “By holding both Boufarah and SAMR responsible, we are sending a message that workers’ compensation fraud is serious crime and all involved will be held accountable.”
According to the charges against them, the defendants falsely asserted that all but a handful of SAMR’s 50-72 employees were office workers performing clerical tasks, but in reality most of them were warehouse workers performing higher-risk jobs like disassembling and refurbishing televisions, computers, and other electronic devices. Coverage premiums are higher for employees performing higher risk jobs.
The scheme bilked New Jersey Casualty (NJC), a subsidiary of New Jersey Manufacturer’s Insurance Company (NJM), out of $598,282 from January 2011 through June 2014.
Also charged in the scheme:
Donna DeMartino, 41, of Brick, an official at SAMR. She pleaded guilty to third-degree insurance fraud and was sentenced to two years of probation.
Joseph Amato II, 74, of Waretown, owner and agent at The Amato Agency, LLC. He is charged with conspiracy, insurance fraud, theft by deception, and misconduct by a corporate official, all in the second degree; as well as fourth-degree false swearing.
Joseph Amato III, 50, of Howell, an agent at The Amato Agency LLC. He is charged with conspiracy, insurance fraud, theft by deception, and misconduct by a corporate official, all in the second degree; as well as fourth-degree false swearing.
Jennifer Phillips, 44, of Old Bridge, an agent at The Amato Agency, LLC. She is charged conspiracy, insurance fraud, theft by deception, and misconduct by a corporate official, all in the second degree.
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