January 17, 2012 – Shawn Bryan and Antoinette Capurso-Bryan, both of Newton, and their company, Newton Contracting, of 69 Howard Street, Watertown, pleaded guilty in Suffolk Superior Court to indictments arising out of the misclassification of workers as independent contractors.
Eight counts in the indictments alleged a felony of “misclassifying employees” for purposes of worker’s compensation insurance
The indictments lodged against the three defendants on December 22, 2011 had 46 separate charges arising out of a scheme to misclassify employees as laborers or as independent contractors.
Mr. Bryan and the company were charged in eight counts of the indictments with workers’ compensation premium fraud under General Laws c. 152, § 14(3) that charges a felony with up to five years in state prison for any “person or employer who knowingly misclassifies employees.”
Insurance Fraud Bureau finds premium suppression by classifying $3.4 million in payroll as bogus independent contractors
In 2009, the Insurance Fraud Bureau, as part of an multi-agency investigation resulting from a complaint the Attorney General’s Office received that Newton Contracting’s employees performing roofing work at the Suffolk County Jail Project were misclassified, began an investigation of four of Newton Contracting’s worker’s compensation policies. The investigation of the company’s four worker’s compensation policies in force between July 1, 2005, and July 1, 2009, established that the company had misclassified half of its workforce as subcontractors. The IFB’s investigation further revealed that during its annual worker’s compensation audits, Mr. Bryan failed to disclose to the auditor more than $3.4 million of Newton Contracting’s misclassified subcontractor payroll over the course of the four policy periods.
Written pleas agreement after cooperation
Once the investigation began Newton Contracting and the Bryans cooperated fully in the Attorney General’s investigation and the sentences imposed were pursuant to a written plea agreement that the judge accepted on January 6, 2012.
Pursuant to this plea agreement on the Suffolk Superior Court Judge Janet Sanders sentenced Mr. Bryan to two years in the House of Correction with the sentence suspended for five years. Additionally, Mr. Bryan and Newton Contracting were ordered to pay jointly $100,000 in restitution to Chartis Insurance Agency along with $150,000 in fines. Following her plea to lesser charges, Ms. Capurso-Bryan was put on probation for two years and ordered to pay $74,000 in fines.
Prior AgencyChecklist article on strict independent contractor law in Massachusetts
AgencyChecklist has previously reported on the independent contractor law in Massachusetts: Looking at the Massachusetts Independent Contractor Law (July 8, 2011) and on previous charges against businesses illegally suppressing worker’s compensation premiums and unemployment taxes: $58,000 in Fines for Not Properly Paying Employees and Classifying Them Incorrectly As Independent Contractors (July 14, 2011); $472,000 in Fines for Not Properly Paying Employees (August 10, 2011); and Lowell Staffing Company Owner Indicted for Workman’s Comp Fraud (July 12, 2011).
