Two certificates of insurance handed to a state compliance officer by a construction company have led to the arrests of two men in Miami-Dade County, according to Florida's Chief Financial Officer (via Florida Department of Financial Services). The policies those certificates described never existed, investigators say, even though the company paid for them.
CFO Blaise Ingoglia announced the arrests on Oct. 27. The case was worked by the Criminal Investigations Division of the Department of Financial Services, and the Miami-Dade State Attorney's Office has jurisdiction over the prosecution.
According to the department, it started when a construction company submitted two fraudulent certificates of insurance to a DFS compliance officer. The insurer named on the paperwork confirmed the policies were never active. The department says the $10,500 premium was paid to Yaudat Antonio Ohan.
State officials say Ohan has been permanently barred from holding an insurance agent license since 2002, yet allegedly kept working as an agent anyway. He was arrested Sept. 28 and faces charges of conspiracy to commit racketeering, organized scheme to defraud, grand theft, uttering a forged instrument, unlawful use of a telecommunications device, transacting insurance without a license and insurance funds diversion.
The second man, Alberto Villaruel, was arrested Oct. 20. The department alleges Villaruel knew Ohan wasn't licensed but let him act as agent-in-charge at Villaruel's insurance agency, where premiums were collected without valid coverage being provided. Villaruel is charged with grand theft, organized scheme to defraud and conspiracy to commit racketeering.
These are charges, not convictions. Both men are presumed innocent, and the case is pending. The release doesn't name the agency, the construction company, or what type of coverage the certificates claimed to show.
"Floridians' insurance policies are meant to protect them, not fund criminals' bank accounts," Ingoglia said in the release. He added that anyone acting as an unlicensed agent, or helping one, "will face the full brunt of the law" and "be put in handcuffs."
The department asks anyone with information about insurance fraud to call its hotline at 1-800-378-0445 or report it through FraudFreeFlorida.com.
The part of this story that should make a contractor wince is the timeline. The company apparently believed it was covered. It had paid. It had certificates. It took a check by the state, and a call to the insurer, to show there was nothing behind the paper.
In Florida, that kind of gap can get expensive fast if the missing policy is workers' comp. The Division of Workers' Compensation says any construction employer with even one employee has to carry Florida coverage, and that sole proprietors, partners, corporate officers and LLC members in construction count as employees under the law unless they hold a valid exemption.
When the state finds an employer that should have coverage and doesn't, it can issue a stop-work order that shuts down all of that employer's business operations in Florida. Under the workers' comp statute, the penalty is generally twice what the premium would have been for uninsured periods over a two-year lookback, with a $1,000 minimum, and working while the order is in effect adds $1,000 a day. The order stays in place until the department releases it, which generally means getting covered and paying at least part of the penalty.
Why it matters for Contractors
A certificate of insurance is a piece of paper, and paper can be faked. If you're buying a policy, especially from an agent or agency you don't know well, call the carrier directly using a number you looked up yourself, not one printed on the certificate, and confirm the policy number, the dates and that it's actually in force. Do the same when a sub hands you a COI.
For workers' comp, Florida gives you a free check. The Division of Workers' Compensation's data portal has a "Coverage and Exemptions" search where you can look up whether a policy or exemption is on file with the state. It's worth running on your own business after you buy or renew, and on every sub before they start, since the division tells contractors to make sure subs are covered before they begin work.
Before you hand anyone a premium check, it's worth confirming with DFS that the person selling you the policy actually holds an active Florida agent license. Cheap coverage from someone who can't show one is a warning sign, not a bargain.