The District Attorney’s office is cracking down on companies that use off the books payrolls to cheat on workers’ comp insurance payments. As a part of this crackdown, a New York roofing company that allegedly made use of off the books payrolls has plead guilty to workers’ comp fraud.
As a result of the guilty plea, the company, Art Roofing, Inc., and owner Arjan Coku, will repay $178,000 to the New York State Insurance Fund.
Off the book payroll schemes are used by businesses looking to avoid paying the full amount they owe for insurance premiums. Since workers’ comp insurance premiums are calculated based partially on payroll numbers, underreporting payroll is one way that businesses cheat the system.
From 2001 to 2007 Art Roofing is accused of underreporting their payroll by $454,130. Companies that cheat on insurance premiums essentially take away money from the pool of funds available to injured workers.