Brothers arrested in workers' compensation fraud scheme
Edwin, Jorge Hernandez-Gonzalez arrested on multiple fraud charges
BROWARD COUNTY, Fla. – Two brothers accused of opening a "shell" company to defraud their workers' compensation insurance carrier and laundering their business-to-business checks through complicit service businesses were arrested Tuesday.
Edwin Hernandez-Gonzalez, 24, and Jorge Hernandez-Gonzalez, 25, face charges of scheme to defraud, workers' compensation fraud and grand theft.
The Miami-Dade Police Department, Palm Beach County Sheriff's Office and Broward Sheriff's Office collaborated in the investigation.
According to detectives, the brothers opened the shell company, Hernago and Associates Inc., in March.
They said general contractors for whom the uninsured subcontractors were working with were led to believe that they were related to Hernago and Associates Inc., when in reality they were renting the company's COI to obtain construction jobs.
Detectives said Jorge Hernandez-Gonzalez, who was listed as the sole owner of Hernago and Associates, Inc., fraudulently obtained a minimal workers' compensation policy for the company.
The policy was based on seven employees with an annual payroll of $143,000. The type of work to be performed was listed as plastering stucco.
Detectives said from March 27 to June 10, more than $6 million was reported to the IRS in the names of Jorge and Edwin Hernandez-Gonzalez and Hernago and Associates, Inc.
According to an arrest report, Jorge Hernandez-Gonzalez admitted to enlisting his brother to assist him in negotiating and cashing business-to-business checks, but claimed that he did so at the request of an unknown Hispanic man.
Detectives said Jorge Hernandez-Gonzalez continued to cash business-to-business checks after he was interviewed by detectives on Sept. 4.
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