Roofer Pleads Guilty in Scheme Involving Unemployment, Comp

Thursday, November 5, 2015 | 0

A Michigan roofing company pleaded guilty this week to federal mail fraud and health care fraud charges in connection with a scheme to have workers fraudulently file for unemployment benefits and misreport on-the-job injuries to reduce workers' compensation premiums.

U.S. Attorney Barbara McQuade said in a press release that Lutz Roofing Co. allowed workers to work part time during winter months and to file for full unemployment benefits as if they hadn't worked at all. She said the company would later pay workers for a full week once they had banked enough part-time hours.

"Lutz engaged in a practice known as 'banking hours,' -- that is, Lutz did not pay certain part-time employees when they worked, but rather, allowed them to continue to collect unemployment compensation that they were ineligible for because of the hours worked," McQuade's office said in the press release.

Prosecutors said the scheme cost the Michigan Unemployment Insurance Agency more than $104,000 between 2007 and 2012, according to prosecutors.

Prosecutors also said Lutz also directed workers to falsely report that on-the-job injuries were suffered outside of work costs health insurance plans more than $70,000 between 2008 and 2010.

Defense attorney Steve Fishman, who represented Lutz Roofing in the case, told the news service Mlive.com .com said the company didn't benefit financially from the illegal practices.

"Lutz Roofing has always been known for its generosity toward its employees," Fishman said. "Although the company acknowledges that its conduct was clearly wrong, Lutz received no financial benefit from these transactions."

Prosecutors, however, said the company held down its workers' compensation premiums by failing to report on-the-job injuries.

A plea agreement calls for the company to pay $174,267 in restitution to the Michigan Employment Security Commission and health care providers. A sentencing hearing is scheduled for March 17, 2016.

The mlive.com story is here.