A landscaping company, Jammers Groundscapes, in Pflugerville, TX pled guilty to misrepresenting payroll. The company was investigated by their workers’ compensation carrier Texas Mutual Insurance Company, and they are expected to pay back $400,000 for their fraud.

The Texas Department of Insurance, Division of Workers’ Compensation’s (DWC) prosecution unit obtained the conviction.

Workers’ compensation premiums are based on an employer’s reported payroll, job classification codes and employer’s past losses. If an employer misrepresents any of these factors they could receive a lower premium rate, a form of fraud. The company defrauded their insurer between 2009 and 2015 by hiding payroll associated with a related company who did not carry workers’ compensation insurance. As a result Jammers received a lower policy premium rate.

“When dishonest companies commit premium or payroll fraud, they can put their employee’s coverage at risk,” said Tim Riley, DWC’s deputy commissioner of Compliance and Investigations. “It’s also a way dishonest businesses can gain a business advantage over ethical companies that are paying the full cost of their premiums.”

Read the press release from TDI.