On September 27, 2016, Attorney General Maura Healey announced that a statewide Grand Jury had indicted Paul and Cynthia Caron, 58 and 60, respectively, of 71 Belmont Street, Fall River on five counts each of workers’ compensation fraud. Cynthia Caron was also indicted on an additional five counts of larceny.
The workers’ compensation fraud indictments allege the Carons’ intentional misclassification of their workers on their company’s yearly insurance audits. As a result of this deliberate misclassification, the Carons defrauding their insurance carriers of more than $71,000 in insurance premiums otherwise payable for their workers’ compensation insurance coverages.
Insurance Fraud Bureau referred the Carons’ case to the Attorney General
The Carons’ alleged premium fraud came to the Attorney General as the result of an investigation by the Insurance Fraud Bureau of Massachusetts.
The investigation revealed that the Carons had failed to disclose the true nature of the work that their company performed between 2009 and 2014 in order to lower their workers’ compensation insurance premiums. The Carons allegedly described their employees as carpenters during annual insurance audits. In fact, Caron Contracting was almost exclusively a roofing company and not a general contractor. By not disclosing the work actually being performed by their workers, the Carons allegedly defrauded two insurance companies under five separate insurance policies.
“This case symbolizes the continued team effort between the Attorney General’s Office and the Insurance Fraud Bureau to combat workers’ compensation fraud,” said Anthony M. DiPaolo, Chief of Investigations at the Insurance Fraud Bureau. “This type of fraud creates an unfair advantage for business owners who artificially lower their premiums to gain an edge over their competitors.”
Third company whose owners indicted for classifying roofers as carpenters
In announcing the Carons’ indictments, Attorney General Maura Healey stated that, “We allege these defendants intentionally misrepresented the work performed by their company in order to avoid paying higher workers’ compensation costs.” The Attorney General then went on to state “Our office is committed to investigating and prosecuting those who engage in this type of fraud for their own benefit.”
The Attorney General’s statement that her office is committed to prosecuting workers’ compensation premium fraud in general and for roofing companies in particular seems quite accurate.
The Attorney General’s Office, working with the Insurance Fraud Bureau, has been quite diligent over the last several years in pursuing roofing companies that misrepresent their workers’ job classifications in order to cheat their workers’ compensation insurance carriers out of premium.
The Carons are the third owners of a roofing company who have been indicted in the last several years for classifying their roofer employees as carpenters.
In March of this year, Robert Foss, the owner of Bob Foss Contracting, was indicted on four counts of worker’s compensation fraud by the Attorney General’s statewide Grand Jury involving misclassifying with roofer employees. See Agency Checklists’ March 7, 2016 article, “Roofer Indicted For $120,000 Dollars In Premium Fraud.”
In October 2011, Thomas Leonard, the owner of the roofing company TLC Exteriors, pleaded guilty to indictments for worker’s compensation fraud (4 counts) and larceny in another case by the Attorney General charging the wrongful classification of roofing workers. See Agency Checklists’ October 17, 2011 article “South Hadley Man Pleads Guilty to Defrauding Insurance Company.”
All three of the owners of these roofing companies, Mr. Leonard, Mr. Foss, and Mr. and Mrs. Caron, were indicted for the same the same exact fraud: They classified their roofer employees as carpenters in order to avoid paying the higher worker’s compensation premium resulting from roofing being a much higher risk job classification than carpentry.
Incorporated as a roofing company then reincorporated as a general contractor
In 1987, Paul and Cynthia Caron, incorporated their roofing business that they apparently had started in 1984, as Quality Roofing, Inc. located at their home address, 71 Belmont St., Fall River.
In 1991, they incorporated their present company Caron Construction, Inc. from this same address. Quality roofing, was involuntarily dissolved by the Secretary of State in 1998. All of the corporate filings of Caron Construction are up-to-date as of 2016.
The officers and directors of the two companies have always been listed as Paul Caron of 71 Belmont St., Fall River and Cynthia Caron, of the same address. The corporate addresses for both companies has always been the same 71 Belmont St. address.
The corporate purpose of Caron Construction was listed on its articles of organization’s as “To carry on a general contracting business, and to that end, to acquire, deal in, and advertise in all types of general contracting work…”
Notwithstanding that the company’s purpose was general contracting, apparently the prime work conducted by Caron Construction was roofing installation and repair, similar to that similar the business that Quality Roofing would have carried on when it was in existence.
Company website all about roofing and not general contracting
Although the Carons’ audits apparently represented that the company’s employees were performing carpentry, the company’s website, states, “Since 1984 Caron Contracting has been specializing in residentail (sic) and commercial roofing in the Bristol County Area. We will evaluate your roof, present the best solution to fit your needs, and budget and work with you on the planning details.”
The company’s website also pictures workers doing roofing. In addition, the welcome page states,“Caron Contracting has everything for all your roofing needs.”
These pictures and statements by the Carons’ company as to the nature of the work will presumably be Exhibits A and B for the prosecution.
False statements to obtain coverage or intentionally mis-classifying employees is a felony
Business that have high workers’ compensation premiums because of their employees’ high-risk premium classifications should understand that the workers’ compensation statute, M.G.L. c. 152, § 14(3) makes it a felony to:
– imprisonment in the state prison for not more than five years or by imprisonment in jail for not less than six months nor more than two and one-half years…
…knowingly [make] any false or misleading statement, representation or submission …for the purpose of obtaining…coverage… [or for] any person or employer…knowingly misclassify[ing] employees …
The violation of §14 carries “imprisonment in the state prison for not more than five years or by imprisonment in jail for not less than six months nor more than two and one-half years and a fine of or by a fine of not less than one thousand nor more than ten thousand dollars, or by both.” Additionally, the same statute provides that,
A person found guilty of violating this section [§14(3)] shall, in all cases, upon conviction, in addition to any other punishment, be ordered to make restitution for any financial loss sustained to an aggrieved person as a result of the commission of the crime….
Mr. and Mrs. Caron indicted by Attorney General’s statewide Grand Jury
The statewide Grand Jury laws allows the Attorney General to use a simplified indictment procedure.
Under the statewide Grand Jury law, the Attorney General need only present evidence to a designated county Grand Jury to have indictments returned for any county. In this case, the Grand Jury convened by the Attorney General sitting in Suffolk County returned indictments that will heard and tried in Bristol County where Fall River is located.
No date has been set yet for the arraignment of the Carons in Bristol County Superior Court.