Quick answer: In March 2026, Florida CFO Blaise Ingoglia announced an arrest in a workers’ compensation premium fraud case involving $1,090,504 in alleged unpaid premiums. Investigators say the business owner used two money service businesses to conceal payroll and did not tell his insurer about major payroll changes. The case is a reminder that Florida employers must report payroll accurately, because underreporting can bring criminal charges, stop-work orders, and steep penalties. These are allegations, and the accused is presumed innocent.
What Happened in the Florida Payroll Shell Game Case
According to the Florida Department of Financial Services press release, the Criminal Investigations Division arrested a man on March 3, 2026, and the case is being prosecuted by the Martin County State Attorney’s Office. Over roughly two years, the release says, he allegedly routed payroll through two money service businesses and failed to disclose major payroll changes to his workers’ compensation insurer, avoiding $1,090,504 in premium. He faces charges of organized scheme to defraud and workers’ compensation premium avoidance fraud. The CFO said, “A scheme to commit fraud of this magnitude is no minor offense.”
Why Premium Avoidance Hurts Honest Florida Businesses
Workers’ compensation premiums are built on payroll and job classification. When one employer hides payroll, it can underbid competitors who report honestly. It also pushes up costs for everyone else. We saw the same pattern in our post on a $100 million Florida workers’ comp fraud ring, where shell companies and rented certificates distorted the contractor market.
What Florida Law Says About Penalties
Under Florida Statutes section 440.107, the Department of Financial Services can issue a stop-work order within 72 hours after finding an employer has not secured required coverage or has not produced requested records within 21 days. The penalty is generally two times the premium the employer would have paid for the uninsured period, or $1,000, whichever is greater, and it can look back 24 months for understated payroll or repeat violations. Operating in violation of a stop-work order carries $1,000 per day. The statute also provides a $5,000 per worker penalty when an employer represents a worker as an independent contractor who is determined not to be one.
Where Honest Employers Get Into Trouble
Most premium problems are not criminal schemes. They are everyday mistakes that can still become costly at audit:
- Misclassified workers. Treating employees as 1099 contractors without clear independence. Federal guidance uses an economic reality test, as legal commentary on the 2026 rule explains.
- Payroll paid outside the books. Cash, payroll cards, or third parties that never reach the carrier’s audit.
- Wrong class codes. Placing field workers in clerical classifications.
- Subcontractors without certificates. Uninsured subs can shift their payroll onto your policy at audit.
Practical Steps to Protect Your Business
- Reconcile payroll to your policy each quarter. Compare payroll reports, payroll provider records, and what your carrier has on file.
- Tell your carrier about changes promptly. New locations, headcount jumps, and new operations affect premium and classification.
- Collect current certificates from every subcontractor. Verify coverage with the state’s proof of coverage database.
- Document worker status. Keep agreements and facts that support independent contractor status.
- Prepare for the audit. Keep payroll registers, 1099s, and tax filings organized. Respond to records requests within 21 days.
Connect Compliance to Your Savings
Accurate reporting also positions you to benefit from falling rates. Our look at the proposed 2027 Florida workers’ comp rate decrease explains how to capture savings at renewal, and our guide to Florida hurricane contractor fraud shows why vetting contractors matters. See also our 2026 Florida commercial insurance trends.
Frequently Asked Questions
What is workers’ compensation premium avoidance fraud in Florida?
It is knowingly misrepresenting payroll, employee counts, or classifications to reduce workers’ compensation premium. It can be charged as a crime in addition to civil penalties.
What is a stop-work order?
It is an order from the Department of Financial Services that halts business operations when an employer has not secured required coverage or produced records on time. It stays in effect until the department releases it.
How much is the penalty for not having workers’ comp in Florida?
Generally two times the premium that would have been paid, or $1,000, whichever is greater, with possible reductions and a longer lookback in some cases. Violating a stop-work order adds $1,000 per day.
Can I treat all my workers as independent contractors?
No. Classification depends on the real working relationship, not a label. A misclassified worker injured on the job can create serious exposure.
Does paying through a payroll company protect me?
Only if all wages are accurately reported to your insurer. The use of third parties does not change your reporting obligations.
Talk to a Florida Workers’ Comp Advisor
Highlight Risk Services helps Florida employers review classifications, prepare for audits, and structure compliant programs. Learn what we do or contact us to review your workers’ compensation program.
This article reports allegations that have not been proven in court. It is general information, not legal or insurance advice; consult your attorney and insurance professional.