The Insurance Fraud Bureau of Massachusetts referred this case to the Attorney General’s Office
Kruy Koch, the owner and operator of Lowell-based MK Environmental, Inc. was indicted last week on charges of Worker’s Compensation Fraud (5 Counts) and Larceny Over $250 (5 Counts). A Statewide Grand Jury returned the indictments against Mr. Kroch on March 13, 2013. He will likely be arraigned later this month.
“Premium avoidance undermines the insurance system and puts lawful employers at a disadvantage,” AG Coakley said. “The prosecution of these schemes prevents the increase in insurance premiums that often results from these crimes.”
According to authorities, Kroch grossly under-reported the number of employees, payroll and jobs undertaken at his company MK Environmental in order to receive the lowest premium rate on his policy.
According to authorities, and contrary to reports made to his insurance provider, MK Environmental employed up to 30 workers with at least four full-time between 2007 and 2012 and misclassified the work of his company during the same period. As a result of this premium avoidance scheme, Kroch underpaid his workers’ compensation insurer thousands of dollars in premium payments.
Travelers Indemnity Company insured Kroch’s company for both its Workers Compensation Insurance and Employers Liability Insurance from April 2007 through December 2012. While no claim was filed under the erroneous policy, the AG’s office states that Kroch unknowingly put his insurer at risk to cover any undisclosed employees for injuries that might have occurred during the policy periods.
