Workers Comp: The Biggest Premium Discount Ever?

handcuffs and judge's gavel

Norma Lopez Cedillo is the president of Nuvo Contractor, based in West Palm Beach, Florida. Like many in the construction industry, she is not happy with the high cost of workers compensation insurance. Despite an actual payroll of about $4 million, she reported payroll of only $22,311, resulting in a comp premium of less than $5,000. That’s a premium discount in excess of 99 percent. Biggest discount ever?

According to State of Florida CFO Jimmy Patronis, her under-reporting of payroll resulted in the avoidance of $737,000 in premium. Perhaps the most astounding aspect of this case is how the fraud was discovered: the policy was terminated after about 6 months due to non-payment, which led directly to an investigation of her actual payroll. In other words, Cedillo’s failure to pay the miniscule premium revealed the massive fraud of the actual premium.

Cedillo has been charged with workers comp premium fraud, organized scheme to defraud and conspiracy to commit grand theft over $100,000. She faces up to 30 years in prison. If convicted, and if she behaves well, she may qualify for a reduction in the years she has to serve, but that discount will inevitably fall far short of the ill-gotten 99 percent.

Jon Coppelman
Senior Workers Compensation Consultant

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