South Hadley Man Indicted in Connection with Defrauding Insurance Company of Over $107,000 in Workers' Compensation Funds
"Mr. Leonard allegedly lied to his insurance company in order to save money on his workers' compensation policies, thereby risking the health and well-being of his workers if any of them were ever injured on the job," AG Coakley said. "It is the duty of all employers in the Commonwealth to provide the proper insurance coverage for their employees, and our office will continue to hold those accountable who try to avoid that responsibility."
In November 2009, the Attorney General's Office began an investigation after the matter was referred by the Massachusetts Insurance Fraud Bureau (IFB), which initially learned of Leonard's activities from AIM Mutual Insurance Company (AIM). Leonard was the owner of TLC Exteriors (TLC), a roofing business in South Hadley. Investigators discovered that during a four year period between May 2004 through May 2008, Leonard allegedly misclassified his workers as carpenters, instead of roofers, in order to avoid paying higher workers' compensation insurance premiums. The proper insurance premiums are calculated by the Workers' Compensation Ratings and Inspection Bureau (WCRIB) which provides these rates based on the risk exposure of work conducted. Authorities allege that Leonard classified his workers as performing less risky work in order to avoid paying a higher amount of workers' compensation insurance premium. He should have paid a higher rate insurance premium based on the fact that his employees were actually roofing, which is a higher risk job classification. Leonard told his insurance company that he had a carpentry business and that any roofing was subcontracted to other businesses. IFB investigators discovered that Leonard had employed full-time roofers since his first policy with AIM in May 2004 and that as a result of his fraudulent activities, Leonard defrauded AIM of over $107,000 in workers compensation premiums. The IFB then referred the matter to the Attorney General's Office for prosecution.
A Hampshire County Grand Jury returned indictments against Leonard yesterday. He is scheduled to be arraigned on July 15, 2010, in Hampshire Superior Court.
The case is being prosecuted by Assistant Attorney General Audrey Cosgrove of AG Coakley's Insurance and Unemployment fraud Division, and was investigated by the IFB.