Gas Station Owners Indicted For Insurance Fraud And Labor Law Violations
Attorney General Spitzer, Workers' Compensation Fraud Inspector General John Burgher, New York State Police Superintendent James McMahon, Labor Commissioner Linda Angello, and State Insurance Fund Executive Director Kenneth Ross today announced the arrest and indictment of two Westchester men who own and operate 21gas stations, convenience marts, and car washes throughout the Hudson Valley.
A 25-count indictment was unsealed before Dutchess County Court Judge Gerald V. Hayes charging Musa Eljamal, 57, of Ardsely; his son, Sammy Eljamal, 28, of Purchase; and a business they control with Insurance Fraud, Conspiracy, Fraudulent Practices, and Failure to Pay Wages to Employees.
The Eljamals were arraigned and entered pleas of not-guilty. They were released on their own recognizance with the defendants personal residences serving to secure future court appearances.
"It is alleged that the defendants ran a far-flung enterprise in which they stole from the taxpayers; and routinely exploited employees," said Attorney General Spitzer. "There has been a significant commitment of five agencies, working cooperatively to investigate and prosecute this case. I offer my thanks to the Inspector General, the State Police, the Insurance Fund, and the Department of Labor, for all their assistance."
John H. Burgher, Inspector General for Workers' Compensation Board said: "Governor Pataki and the Legislature made workers' compensation fraud a felony in 1996, sending a strong message that cheating the system at any level will not be tolerated. People who are contemplating committing fraud should take a hard look at these indictments and think again. I applaud all of the agencies involved for their cooperation in conducting this complex investigation."
The indictment alleges that the Eljamals and Courtesy Mobil owned and operated gas stations, convenience stores, and several related businesses in the Bronx, Dutchess, Orange, Putnam, Rockland, Ulster, and Westchester counties, many of which were Mobil Oil company franchises. Both Eljamals are charged with conspiring to defraud the New York State Insurance Fund of more than $400,000 by under- reporting the total payroll of the business.
It is further alleged that the Eljamals exploited their employees, and failed to account for their wages. It is estimated that they did not pay more than $700,000 in overtime wages owed to those employees.
If convicted of the most serious charge, Insurance Fraud in the Second Degree, the Eljamals face a maximum sentence of up to 15 years in state prison. They also face a maximum possible fine of twice the amount gained from their criminal conduct. In addition, under the Workers' Compensation Law, the State Insurance Fund may seek treble damages from the Eljamals, totaling more than $1.2 million in civil damages.
The case was brought to the attention of the Attorney General's Office by the City of Newburgh Police Department. In February, investigators from the Attorney General's Office and the New York State Police simultaneously executed search warrants at twenty-seven locations in Bronx, Kings, Putnam, Westchester, Rockland, Dutchess and Orange counties seizing numerous business and payroll records. This evidence was subsequently analyzed by a team of auditors from the Workers' Compensation Board, Office of Fraud Inspector General; and the New York State Insurance Fund.
New York State Police Superintendent James W. McMahon said: "These indictments are a direct result of the cooperative and interactive efforts of the agencies involved in this investigation. Working together we were able to bring to justice those individuals who exploited their employees and cheated the public out of hundreds of thousands of dollars."
Linda Angello, Commissioner of the New York State Department of Labor said: "Governor Pataki has made it a priority to ensure that all working men and women in New York State are paid fairly by their employers for the work they perform. The State Labor Department will continue to work with other agencies to make certain those who would deprive workers their proper wages are caught and prosecuted."
Kenneth Ross, Executive Director of the New York State Insurance Fund said: "We applaud Attorney General Spitzer and Workers' Compensation Inspector General Burgher for their resolve in bringing these defendants to justice. NYSIF investigators and auditors worked diligently on this case for six months. We recognize , as do the Attorney General and Inspector General, that falsifying payroll records to avoid paying correct premiums is a serous workers's compensation fraud. Businesses must know that NYSIF does not tolerate premium fraud and aggressively pursues all workers' compensation fraud, whether committed by policyholders, medical providers, or claimants."
The case is being prosecuted by Assistant Attorneys General Christopher P. Borek and LynneAnne Tabbott of the Criminal Prosecutions Bureau. Investigator Michael Battisti of the Attorney General's Office led the investigation with assistance from Assistant Inspector General of Audit Michael V. McCarry, and Ida Ong of the State Insurance Fund, Investigator William Murphy of the New York State Police Special Investigations Unit and Sondra Lavine of the Attorney General's Office.
The charges against the defendants are accusations, and the defendants are presumed innocent until proven guilty.
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