Paint BidTracker

Project Intelligence for the Painting Industry

A Product of Technology Publishing
JPCL | PaintSquare | Durability + Design | Paint BidTracker

Sign-up for a Free Trial...or Login
Email/Username* Password*
Follow us on Twitter  |   Join us on Facebook
About Paint BidTracker | Contact Us | Advertise | Search

Paint and Coatings Industry News

Main News Page


Construction Owner Admits $450K Theft

Monday, December 10, 2012

Comment | More

The former owner of two defunct New Jersey construction companies is facing eight years in prison after admitting to insurance and tax fraud that netted him more than $450,000.

Prosecutors said Herlindo Garcia-Merlos, 49, whose last known address was in Trenton, lied to his workers’ compensation carrier, failed to file five years' worth of tax returns, and underreported his own wages on tax returns.

Garcia-Merlos pleaded guilty Nov. 28 to a criminal accusation charging him with two counts of second-degree theft by deception before Superior Court Judge Gerald Council in Mercer County. 

Herlindo Garcia-Merlos

Herlindo Garcia-Merlos, 49, faces an eight-year prison sentence.

Sentencing is set for Jan. 23. Under the plea agreement, the state will recommend that Garcia-Merlos be sentenced to eight years in state prison. In addition, the state is seeking $315,680 in restitution on behalf of New Jersey Manufacturers Insurance Group and $135,462 on behalf of the New Jersey Department of Treasury.

Insurance Fraud

“This defendant was responsible for making sure that he had adequate and lawful workers’ compensation coverage for his companies,” said Acting Insurance Fraud Prosecutor Ronald Chillemi.

“By providing misinformation to his workers’ compensation carrier, he not only failed in this responsibility but also defrauded an insurance company out of hundreds of thousands of dollars. The cost of such fraud is passed on to consumers through increased premiums."

Garcia-Merlos was president of the now-defunct Orients Construction Company Inc., located in Trenton. In March 2009, Garcia-Merlos ceased doing business as Orients and began doing business as Melrose Construction Inc. in Trenton.

In pleading guilty, Garcia-Merlos admitted that, between February 2007 and April 2010, he provided "false and misleading information" to NJM Insurance Group, according to a release from the New Jersey Attorney General's Office.

Ronald Chillemi

Prosecutor Ronald Chillemi said Garcia-Merlos defrauded his insurer out of hundreds of thousands of dollars.

"The investigation determined that the type of services rendered by Orients, as well as the amount of payroll during the specified policy periods, were not true," the AG's office said. The fraud allowed Garcia-Merlos to avoid paying $315,680 in insurance premiums.

Tax Dodger

Garcia-Merlos also pleaded guilty to stealing more than $135,462 by failing to file tax returns for his companies.  Authorities said he did not file returns "for Orients and/or Melrose" Construction in 2006, 2007, 2008, 2009 and 2010. During the same years, he underreported his own wages on his individual tax returns, authorities said.

Deputy Attorney General Cheryl Maccaroni and Detective Natalie L. Brotherston coordinated the investigation. 

Chillemi noted that some important insurance fraud cases have started with anonymous tips. Tips may be reported to the state's toll-free hotline at 1-877-55-FRAUD, or visiting www.NJInsurancefraud.org. State regulations allow for payment of a reward to tipsters whose information leads to an arrest, prosecution and conviction for insurance fraud.

   

Tagged categories: Enforcement; Government; Insurance; Laws and litigation; Taxes; Workers

Comment Join the Conversation:

Sign in to our community to add your comments.

Absolute Equipment/Grand Rental Station
TIER 4 EQUIPMENT

We have Tier 4 Equipment including Air Compressors & Generators for Sale & Rent! Your job may now require Tier-4. www.absoluteequip.com or Call 412-931-6655.


ChemMasters, Inc.
Most Specified Brand for Concrete Structures

#1 choice of specifiers for acrylics & elastomerics, epoxy/urethane systems, silane & siloxane treatments, HMWM & epoxy crack healer/sealers, & repair mortars.


Atlantic Design, Inc.
GOING BEYOND INDUSTRY STANDARDS

The ADI HD40 Dust Collector is a smaller, more economical way to meet/ exceed Industry standards. Watch the video for details on our website. 866.Call.ADI


NLB Corporation
NLB Sure Shroud: Greater Protection and Flexibility

NLB’s Sure Shroud’s lighter weight and flexibility reduces operator fatigue and offers unmatched protection against high pressure hose ruptures. 10k to 40k psi rated.


DRYCO
Humidity & Temperature Control Equipment

Rental Desiccant Dehumidifiers, ArcticDRY Units, Air Conditioners, Heaters and Generators to help control the climate on your next industrial painting project. Nationwide locations, 24/7 service: (866) 379-2600 www.drycogroup.com”


Clemco Industries Corp.
Maximum Dust Suppression Systems Start at $14,950

The system comprises proven technology and equipment with user-friendly flexibility in mind. See it in action.


Safway Services
One Source. Every Solution.

The Safway Group is your source for multiservices. Painting, coating, insulation and more – all from the most trusted name in the industry.

Technology Publishing

The Technology Publishing Network

The Journal of Protective Coatings & Linings (JPCL) PaintSquare
Durability + Design Paint BidTracker

 
USE Paint BidTracker:      Get a Free Trial
 
EXPLORE Paint BidTracker:      Project Showcase   |   Blogs   |   Social   |   News   |   Webinars   |   White Papers   |   Links   |   Standards   |   Classifieds
 
KNOW Paint BidTracker:      FAQ   |   About Paint BidTracker   |   Privacy policy   |   Terms & conditions   |   Site Map   |   Search   |   Contact Us
 

© Copyright 2000 - 2016, Technology Publishing, Co., All rights reserved
2100 Wharton Street, Suite 310, Pittsburgh PA 15203-1951; Tel 1-412-431-8300; Fax 1-412-431-5428; E-mail webmaster@paintsquare.com