For Immediate Release - December 15, 2014

Chelsea Man Indicted in Connection with Workers’ Compensation Fraud

Alleged Scheme Resulted in Thousands of Dollars in Fraud

BOSTON – A Chelsea man has been indicted on charges he failed to accurately report the total payroll of his business to avoid paying more than $45,000 in insurance premiums, Attorney General Martha Coakley announced today.

“Premium avoidance puts lawful employers at a disadvantage and undermines the insurance system,” AG Coakley said. “The prosecution of these schemes prevents the increase in insurance premiums that often results from these crimes.”

Elburke Lamson, 50, was indicted on charges of Workers’ Compensation Fraud (2 counts) and Larceny Over $250 (2 counts). 

Lamson was operating as the manager of Legal Pro Temps, Inc. (Legal Pro), a now defunct staffing company located in Dorchester.

According to authorities Legal Pro was insured by Atlantic Charter Insurance Company for Workers Compensation Insurance and Employers Liability Insurance from November 2007 through November 2009. In an effort to evade high insurance premiums, Lamson allegedly underreported or failed to report his payroll to his insurance company.

According to authorities, and contrary to reports made to his insurance provider, Legal Pro operated with a payroll totaling more than $2 million billed through its vendors, but only reported a payroll totaling more than $184,000. As a result of this premium avoidance scheme, Lamson underpaid his workers’ compensation insurer more than $45,000 in premium payments. 

Based on his reporting, Lamson was granted a lower premium rate on his policy. As a result of this alleged scheme, Lamson put Atlantic Insurance unknowingly at risk to cover any undisclosed employees for injuries that occurred or may have occurred during the policy periods.    

A Suffolk Superior Grand Jury returned indictments against Lamson on Dec. 11. Lamson is scheduled to be arraigned on Jan. 6, 2015.

The Insurance Fraud Bureau of Massachusetts (IFB) referred this case to the Attorney General’s Office for investigation.

In 2013, AG Coakley’s Insurance and Unemployment Fraud Division (IUFD) recovered more than $1.4 million in restitution for the state. The IUFD 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 systems. 

Assistant Attorney General April English of Attorney General Martha Coakley’s Insurance and Unemployment Fraud Division is prosecuting this case with assistance investigator Philip Mantyla of the Attorney General’s Office and investigators from the IFB.