Press Release  Cleaning Company Owners Indicted, Arraigned for Workers’ Compensation Insurance Fraud

Woburn — The owners of a Malden-based cleaning company have been indicted and arraigned in connection with an insurance fraud scheme that misclassified its workers, Attorney General Maura Healey announced today.

Marcello Pompa, age 40, of Saugus, was indicted by a Statewide Grand Jury on Workers Compensation Insurance Fraud (5 counts) and Larceny Over $250 (5 counts). Marcelia Freitas, age 43, also of Saugus, was indicted on Workers Compensation Insurance Fraud (2 counts). Both defendants were arraigned in Middlesex Superior Court, where they pleaded not guilty and were released on personal recognizance. They are due back in court on December 13 for a scheduling conference.

The AG’s Office alleges that between 2010 and 2016, Pompa and Freitas falsely claimed that they used three sub-contractors through their company, M&M Cleaning, Inc. (M&M), in order to lower their workers’ compensation insurance premiums. Investigators allege that Pompa falsely claimed that the work was performed by sub-contractors, concealing more than $2.8 million in M&M’s payroll. Through this scheme, the AG’s Office alleges that M&M evaded paying more than $74,000 in workers’ compensation insurance premiums.

As a result of this alleged intentional misclassification, Pompa and Freitas were able to win multiple contracts, including municipal contracts throughout Massachusetts, by offering a substantially lower price for their cleaning services than their competitors during the bidding process. 

Misclassification is an increasingly common way for employers to avoid their legal obligations to employees and to unfairly compete in the marketplace. Employers that misclassify their workers avoid paying their fair share of unemployment insurance and worker’s compensation contribution. Misclassification not only puts at risk a much-needed safety net for workers injured on the job, but also raises costs on other employers.

These charges are allegations and the defendants are presumed innocent until proven guilty.

This case is being prosecuted by Assistant Attorney General Geoff Wood with assistance from Michelle Silva, both of AG Healey’s Insurance and Unemployment Fraud Unit and from investigators at the Insurance Fraud Bureau.

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