MIAMI -- Authorities held a news conference Thursday announcing the arrest of two Miami-Dade County employees and one former county employee of the Building Code Compliance Office.

In March, BCCO Director Herminio Gonzalez contacted the Miami-Dade Police Department after he suspected a scheme through which his department was issuing contractor licenses without first conducting the proper licensure procedures.

An investigation revealed that at least 138 fraudulently issued contractor licenses had been issued from Jan. 4, 2005, to Dec. 30, 2005, under the computer login profile of a BCCO employee who denied making any of the fake licenses, police said.

Find out if one of these illegal contractors worked for you.

According to local state attorney Katherine Fernandez-Rundle, Lazaro Joel Herrera found a way to use other employees' logins to create false contractor licenses that he would give to two co-workers.

"He would go into the computer system, give a legitimate contractor's license number to these individuals who were not entitled to them," she said. "He would then print out a card … and he would then give that to either one of these two individuals."

Fernandez-Rundle said Jerry Hernandez and Joaquin Barros, who no longer works for the BCCO, would then meet with "wannabe licensed contractors, and from these wannabe licensed contractors they would then take the money."

Authorities said one of the employees whose personal password was being hacked logged arrived at work one morning and received an error message that indicated she was already logged on. The employee immediately notified her supervisor, who discovered that three contractor licenses had been issued at the same time that a supervisor had seen Herrera in the office.

Because the licenses are plastic and can't be made on a paper printer, they could only have been created using a proprietary printer, one of which is located on Herrera's desk, police said.

Videotaped surveillance began at the office pursuant to a court order, and authorities said Herrera could be seen printing what appeared to be contractor licenses from his desk.

Police said search warrants were served at the homes of Herrera, Hernandez and Barros, where they found some of the fake contractor licenses.

Herrera, Hernandez and Barros are charged with racketeering, conspiracy to commit racketeering, scheme to defraud, unlawful access of a computer network, official misconduct, grand theft, and unlawful compensation. Hernandez, who was fired, and Barros turned themselves in to police last month. Herrera, who was also fired, was supposed to surrender to police Thursday, but did not.

Authorities said 178 licenses have been identified as fraudulent and an additional 126 are suspected of being fraudulent.