Anne Milgram, NJ Attorney General, and Deborah L. Gramiccioni, Criminal Justice Director, informed the public that, "The indictments allege that the defendants lied on insurance applications and failed to remit insurance premiums to the insurance companies, instead keeping the money for themselves. It is also charged that the defendants laundered money so that the scheme would go undetected. As a result, many people were allegedly left without workers’ compensation insurance."
"The indictment alleges that between June 2003 and September 2007, Sciarra, a former licensed insurance producer, and his co-defendants fraudulently avoided premium payments for workers’ compensation insurance they obtained for clients. The defendants allegedly submitted falsified applications for workers’ compensation insurance by misrepresenting and omitting information in the applications. These misrepresentations included understating the number of employees leased, the kind of work those employees did and the number of past injury claims involving the employers, all factors that are relevant to determining the cost of workers’ compensation insurance. The defendants also are charged with failing to turn over money that was provided by clients of the PEOs to pay for insurance premiums."
The State of New Jersey has recently enacted legislation expanding its insurance fraud program. In December 2008 the NJ legislature passed and the Governor signed Senate Bill No. 1918 which requires the Insurance Fraud Prosecutor to establish liaison with the Department of Labor and Workplace Development and authorizes its investigation of cases for failure to provide workers' compensation coverage.
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