Workers’ comp fraud charges filed against 3 Amsterdam contractors and a city employee

ALBANY — New  York  State  Inspector  General  Catherine  Leahy  Scott  has announced the  arrests  of  three Amsterdam contractors and one city employee as part of a workers’ compensation fraud sweep that included one of the contractors accused of being a repeat offender.

According to a news release, charged Thursday as part of the sweep were:

∫ Joseph Kellogg, Sr., 51, of Storrie Street, was charged with four counts each of first-degree offering a false instrument for filing and the workers’ compensation crime of fraudulent practices, and one count of the workers’ compensation crime of failure to  secure  compensation, all felonies.

∫ Thomas J. Kelly, 46, of Minaville Street,  was charged with two counts each of first-degree offering a false instrument for filing and the workers’ compensation crime of fraudulent practices, and one count of the workers’ compensation  crime  of  failure  to  secure  compensation, all felonies.

∫ Kurt  B.  LaFata,  50,  of  Locust  Avenue,  was  charged  with first-degree offering  a  false  instrument  for filing and the workers’ compensation crime of  fraudulent practices, felonies, and the workers’ compensation crime of failure to secure compensation as a misdemeanor.

∫ William Forte, 51, of Coolidge Road, was charged with one count each of third-degree grand  larceny and third-degree insurance  fraud, and four  counts  of  the  workers’ compensation crime of fraudulent practices, all felonies.

‘Unfair advantage’

“All of these defendants chose to defraud the workers’ compensation system to either gain an unfair advantage over  honest  construction  companies  or  to  steal  benefits  meant only  for those  who  are  truly  in  need,” said Leahy Scott in a news release. “I will continue to use resources at my disposal to vigorously pursue anyone who fails to obtain the critical coverage they are required to carry or who claims benefits to which they are not entitled.”

Kellogg,  a residential roofing contractor in Amsterdam, was accused in Thursday’s charges of filing four separate building  permit  applications  in  2015  that  included fraudulent certifications  that  he  had  no  employees  and  as such  was  exempt from obtaining workers’ compensation insurance.

In  2013,  Kellogg  pleaded  guilty  to  a misdemeanor  second-degree offering  a  false  instrument  for  filing, for  filing  a  similar  fraudulent certification.

An  investigation  by  the Inspector  General found  that  Kellogg  indeed  used  several  employees  on  his roofing job contracts, at one point employing 11 individuals on two simultaneous projects.

At a trial, subsequent to Kellogg being sued by a homeowner over the quality of one of the roofing jobs, Kellogg testified in court that he had at least 10 employees working for him during the project.

Under state law, employers are required to maintain workers’ compensation coverage for their employees, and employees  are  expected  to  provide  truthful information  regarding  their  work  activity  to  insurance  carriers  and the Workers’ Compensation Board during the time they are receiving benefits.

The Inspector General’s investigations further found that Kelly and LaFata, both working  as  residential  contractors  with  roofing  projects  in  2016,  also  fraudulently  certified  in  building permit applications filed with the city of Amsterdam that they also had no employees and were therefore exempt from obtaining workers’ compensation  coverage.

Investigators  observed  three  workers  at  a  LaFata  job  site during  July 2016, and all three said LaFata told them he had workers’ compensation coverage for them, when he in fact did not.

Similarly, investigators  for  the  Inspector  General  and Amsterdam  city  officials observed at least four workers on Kelly’s job site.

Forte was employed as a truck driver in 2012 when he purportedly injured his left arm and both hands and began receiving workers’ compensation coverage. Since summer 2014, Forte had been receiving weekly payments and repeatedly asserted to his doctors and the insurance company that he was not working in any capacity. Inspector General Leahy Scott’s investigation found that contrary to his assertions.

Forte was indeed an employee working for the city of Amsterdam and had been observed using his purportedly injured arm lifting tools, painting and climbing ladders, the release stated.

He was accused of stealing more than $16,000 in workers’ compensation benefits to which he was not entitled.

The four were arraigned in Amsterdam City Court and bail was set for Kellogg at $10,000 cash or $20,000 bond; $5,000 cash or $10,000 bond for Forte and $2,500 cash or $5,000 bond for Kelly. LaFata was released without bail. All four are due to reappear in court on various dates in December and January.

Inspector General Leahy Scott thanked the city of Amsterdam for assisting with the investigation, Amsterdam Police Department for assisting with the arrests and Montgomery County District Attorney James Conboy for prosecuting the matter.

By Chad Fleck

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