Eight contractors have been charged in a $70 million "cheat to compete" scheme involving workers' compensation fraud and money laundering, Broward County
The complicated plot allegedly involved shell companies, check cashing stores and millions of dollars, including $1 million in cash seized Friday, Lamberti said. But ultimately, the goal was simple: underbid law-abiding contractors in a struggling economy, the sheriff said.
The ringleader was allegedly Hugo Rodriguez, 36, of
His attorney Joseph Bosco disputed the charges, saying, "We've just begun our investigation." Bosco said Rodriguez's "dire" financial condition contradicted the government's allegations. "His house is in foreclosure," Bosco said.
However, one of the accused check-cashing outlets that Rodriguez used, K & N Food Corp. in Palm Beach County, has owners who are cooperating with the joint investigation, investigators said. Nilbala and Kanti Patelhave agreed to the immediate forfeiture of more than $490,000 in illicit proceeds, authorities said.
So far, the joint state-BSO investigation, called "Operation Dirty Money," has netted more than $140 million in fraudulent transactions linked to 12 shell companies. The corruption has extended into cash payments to workers to avoid paying Social Security and other taxes, Lamberti said.
"It was becoming a big industry," added the sheriff, who said the investigation continues.
"This kind of fraud is diverting nearly $1 billion from Florida's economy annually, and is putting honest small businesses and employees at risk," Atwater said.
Some construction companies were willing to "cheat to compete," which allowed them to underbid honest contractors, said Matthew Capece, of the United Brotherhood of Carpenters and Joiners of America. It also endangered workers who were sent to construction companies untrained and vulnerable to injuries.
Construction leaders accused of conspiring with alleged ringleader Rodriguez include
Arrested on the same charges were Luis Santiago, LAS Construction Inc.; Henry Giron, Licold Construction Inc.; Aida Giron, Everalx Construction Inc.; and Eduan Santiago Rivera, E. South Construction Inc.
Staff writer Erika Pesantes contributed to this report.