N.Y. Investigators Continue Crackdown on Fraud

State investigators continued to crackdown on workers’ compensation fraud with arrests in a string of recent cases involving the New York State Insurance Fund.

In separate cases, authorities arrested a Korean national and illegal alien for allegedly concealing the nature of his asbestos removal business; a 38-year-old Long Island man for his part in an alleged scheme to defraud NYSIF of $230,000; a Queens contractor allegedly operating without workers’ comp. insurance, and a Westchester hospital worker who allegedly collected more than $37,500 on a fraudulent claim.

Chae M. Chong, 70, surrendered to the Assistant U.S. Attorney’s Office in Syracuse on Oct. 6, on mail fraud charges stemming from an alleged attempt to defraud NYSIF of premium payments for workers’ comp insurance for an asbestos removal business. Chong, who told NYSIF he operated a messenger service, was being detained on an immigration and Customs Enforcement warrant in county jail in Jamesville, NY, awaiting disposition of the case and deportation from the U.S.

Michael Smith, of Farmingville, NY, was arrested by the Suffolk County DA’s Office on Oct. 10, for felony fraudulent practices involving an attempt to obtain workers’ comp insurance in a company with his mother, while owing NYSIF $230,000 on a cancelled policy.

Smith, owner of Thermo Tech Industries in Medford, NY, had a workers’ comp. policy cancelled by NYSIF for non payment in April 2007. He was arrested in an alleged scheme with his mother, Susan Accardi, to obtain workers’ comp insurance for a company called Parking Lot Maintenance, at the same address as Smith’s cancelled policy. Accardi was previously arrested and charged with application fraud.

Giovani Simoes, 41, of Long Island City, who owns a drywall and painting business, was arrested Oct. 14, after he was hired as a sub-contractor to install drywall for a construction company, allegedly providing a forged certificate of insurance to show he had workers’ comp coverage. Simoes and his corporation, El Shaddai, each face charges of criminal possession of a forged instrument, insurance fraud, grand larceny, falsifying business records and fraudulent practices—all felonies.

Madeline Nieves, 34, of Ganerville, NY, was arrested by the Westchester County DA’s Office on Sept. 23, for an alleged fraudulent claim on which she collected $37,564 from NYSIF. Nieves received benefits for an injury sustained as a patient associate while working for St. Vincent’s Midtown Hospital in New York City in 2006. She returned signed forms to NYSIF indicating she had not returned to work since them, but the investigation revealed she was employed as an office manager for a Bronx, NY, doctor. As a result of her arrest, NYSIF estimated the potential future savings on her claim to be $277,524.