For Immediate Release
Aug. 2, 2011
Contact: Alexis Lambert
(850) 413-2842
CFO Jeff Atwater Calls for Review of Checking Cashing Services Aiding in
Workers’ Comp Fraud
TALLAHASSEE—At a Cabinet meeting today, Florida Chief Financial Officer Jeff Atwater
announced the creation of a working group to review the practices of certain bad actors in the
check cashing services industry aiding in workers’ compensation premium fraud, which is
putting pressure on rates and crippling the business community. The working group will include
representatives from the CFO’s Division of Insurance Fraud as well as the Office of Financial
Regulation, the Attorney General’s Office, and the construction and money services industries.
“This growing crime trend is diverting more than a billion dollars from Florida’s economy,” said
CFO Atwater, whose office oversees the Divisions of Insurance Fraud and Workers’
Compensation. “We are committed to dismantling this scheme and putting these cheats behind
bars. Bringing together stakeholders will take us one step closer to the solutions we need to
expedite jail time for these con artists.”
According to Atwater, this latest workers’ compensation premium scheme is highly organized
and orchestrated by individuals who know the construction and subcontracting industry and are
intent on evading payment of workers’ compensation premiums. Florida law generally requires
every employee in the construction industry to be covered by workers’ compensation insurance.
The effect of this scheme is that workers are left unprotected and honest employers suffer from
an uneven playing field because they are consistently outbid on construction projects by those
who skirt premium requirements.
“These organized schemes are disastrous to honest businesses that pay their workers'
compensation premiums and protect their employees on-the-job,” said Attorney General Bondi.
“Not only is this fraudulent activity costly to the insurance industry, but also it leaves individuals
without protection. We look forward to collaborating with the work group to pursue and
prosecute these con artists.”
John Askins, Director of the Division of Insurance Fraud, and Major Geoffrey Branch, Bureau
Chief of the Division of Workers’ Compensation Fraud, testified on how the scheme works and
how it leads to the avoidance of premiums.
Organized criminal enterprises set up “shell” or fake companies and obtain a minimal workers’
compensation insurance policy. Uninsured contractors pay a fee to use the shell policy, enabling
them to avoid purchasing required workers’ compensation insurance.
The uninsured contractor presents a copy of the shell certificate of insurance to a general
contractor, and often gets the job because he is able to underbid honest contractors by removing
the cost of workers’ compensation insurance from his expenses. The scheme uses money service
businesses to cash the checks that are made out to the shell company.
Atwater said the working group will develop recommendations to help stop hundreds of millions
of dollars that are being diverted from Florida’s economy. Recommendations from the work
group will be presented to the Governor and Cabinet in late fall.
If you have any information regarding suspected insurance fraud call 1-800-378-0445.
Individuals who provide tips can remain anonymous and are eligible for a reward of up to
$25,000 for information that directly leads to an arrest and conviction in an insurance fraud
scheme. The Department of Financial Services to date has awarded almost $250,000 to
approximately 40 citizens as part of its Anti-Fraud Reward Program.
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Chief Financial Officer Jeff Atwater, a statewide elected official and officer of the Florida
Cabinet, oversees the Department of Financial Services including the Division of Insurance
Fraud. CFO Atwater’s priorities include fighting financial fraud, abuse and waste in
government, reducing government spending and regulatory burdens that chase away businesses,
and providing transparency and accountability in spending.