Owner of Lowell Staffing Company Pleads Guilty, Sentenced for Workers’ Compensation Fraud
Evaded Paying $110,000 in Workers’ Compensation Premiums
WOBURN – The owner of a Lowell staffing company has pleaded guilty to charges he underreported the size and scope of his business operations in order to avoid paying approximately $110,000 in workers’ compensation premiums, Attorney General Martha Coakley’s Office announced today.
"Workers’ compensation benefits protect employees who have sustained injuries or incurred disabilities in the workplace,” AG Coakley said. “The defendant undermined the safety of his workers by intentionally making false representations to his insurance companies to avoid paying the proper premiums for his workforce. We bring these cases to protect employees and to level the playing field for businesses that play by the rules.”
Dara Duong, age 53, of Lowell, pleaded guilty to charges of Workers’ Compensation Fraud (3 counts), and Larceny over $250 (2 counts). After the plea was entered, Superior Court Judge Kathe Tuttman sentenced Duong to two-and-a-half years in the House of Correction, suspended for three years and three years of probation. Duong was further ordered to pay full restitution and perform 400 hours of community service at the Muscular Dystrophy Association in Beverly.
The AG’s Office began an investigation in October 2010, after the Massachusetts Insurance Fraud Bureau (IFB) finished its own investigation and referred the matter for prosecution. Duong was the owner of three companies based in Lowell: Middlesex Temporary Agency (Middlesex), Ankgor Staffing, Inc. (Ankgor), and General Labor Services (General Labor). All three companies provided unskilled labor, such as factory workers, to several client companies.
From 2006 through 2008, Duong intentionally underreported his companies’ payrolls, the total number of employees, and the number of clients his employees worked for. Duong also misrepresented job classifications as part of a scheme to avoid paying higher workers’ compensation premiums to two insurance companies. Investigators discovered that based on Duong’s false representations on his insurance policies, he avoided paying approximately $110,000 in workers’ compensation premiums for a total of three policy periods.
A Middlesex Grand Jury returned indictments against Duong on June 28, 2011. He was arraigned on July 14, 2011 in Middlesex Superior Court where he pleaded not guilty and was released on personal recognizance. Duong pleaded guilty yesterday and was sentenced.
AG Coakley’s Insurance and Unemployment Fraud Division works to protect consumers and the integrity of the insurance system by investigating and prosecuting those who commit fraud against all types of insurers, including the Commonwealth’s unemployment insurance and workers’ compensation system. The prosecution of insurance fraud helps prevent the increase in premiums and taxes that are the result of fraudulent insurance claims. In 2011, the Insurance and Unemployment Fraud Division obtained $5,578,934 in restitution orders in 33 matters.
The case was prosecuted by Assistant Attorney General Audrey Cosgrove of AG Coakley’s Insurance and Unemployment Fraud Division, and was originally investigated by the IFB.