Owner Of Bridge Painting Business Guilty Of Insurance Fraud

Attorney General Spitzer, New York State Workers' Compensation Board Fraud Inspector General John Burgher, Jr., State Insurance Fund Chief Executive Officer Kenneth Ross, and State Police Superintendent Wayne Bennett today announced the guilty plea of a Williamsville man for stealing funds from the New York State Insurance Fund.

Leon Hatzipetros, 41, of 339 Sunrise Boulevard, Williamsville, co-owner of Marine Steel Painting Corp. ("Marine Steel"), located at 2064 Zoeller Road in the Town of Alden, entered a guilty plea today before Erie County Court Justice Sheila A. DiTullio to Insurance Fraud in the Third Degree, a class "D" felony. Defendant will be sentenced on June 1, 2005 to a term of up to four years to be determined by the court. Additionally, he has paid full restitution of $145,367.68.

Marine Steel is a commercial bridge painting business that operates throughout the state. Between April 1, 1999, and April 1, 2003, Hatzipetros obtained workman's compensation insurance coverage for employees of Marine Steel through the New York State Insurance Fund ("SIF"). During that time, Hatzipetros submitted quarterly payroll tax returns containing false job classifications to the SIF. The false job classifications submitted by Hatzipetros enabled him to pay $ 145,367.68 less in premium payments than he otherwise would have been obligated to pay.

"High insurance premiums paid by state residents and businesses hamper job growth and create a drag on our economy," said Attorney General Spitzer. "Those high premiums are caused, at least in part, by those who try to cheat the system. My office is working to combat insurance fraud and prevent unscrupulous individuals and businesses from gaining an unfair competitive advantage in the marketplace."

State Workers' Compensation Board Fraud Inspector General John Burgher said: "This arrest and subsequent guilty plea should serve notice to anyone considering fraud that our investigators will go to great lengths to identify their crimes. I want to congratulate the Board's team of auditors who conducted a detailed payroll analysis and developed key evidence in this case. I also applaud all the agencies that played a role in bringing this matter to justice."

New York State Police Superintendent Wayne Bennett said: "This guilty plea is a direct result of the cooperative and interactive efforts of the many agencies involved in the investigation. This case has brought to justice an individual who defrauded the State Insurance Fund by lying about job classifications to obtain lower insurance premiums; an expense that would ultimately cost the general public which bears the expense through increased premiums."

New York State Insurance Fund CEO Ken Ross said: "The State Insurance Fund is among the leading insurance carriers in the state fighting workers' compensation fraud, but we have no intention of resting on our laurels. We will continue to work with law enforcement authorities to crack down on workers' compensation fraud and look for ways to implement new tools to catch businesses that lie about the nature of their work or the amount of their payroll to pay lower premiums, which pushes up the cost of insurance for everyone else. Policyholders, claimants and medical providers should know that we will vigorously investigate and develop cases for prosecution against anyone who attempts to defraud NYSIF."

The Attorney General wishes to thank the Workers' Compensation Board, the State Insurance Fund and the New York State Police for their work in this investigation.

The case was prosecuted by Assistant Attorneys General Russell Ippolito and Richard Ernst of the Attorney General's Criminal Prosecutions Bureau. Assistant Inspector General Michael McCary of the Workers' Compensation Office, Senior Investigator John Cozzolino of the New York State Insurance Fund, and Investigator John Lubecki of the New York State Police conducted the investigation.