South Hadley man indicted in connection with alleged workers' compensation fraud

By OWEN BOSS

Staff Writer

NORTHAMPTON — The owner of a South Hadley roofing company accused of defrauding his insurance company of over $107,000 in workers’ compensation premiums by misclassifying his workers on insurance policies was indicted Tuesday.

A Hampshire County Grand Jury returned indictments against Thomas Leonard, 33, on four counts of larceny over $250 and four counts of workers’ compensation fraud.

“Mr. Leonard allegedly lied to his insurance company in order to save money on his workers’ compensation policies, thereby risking the health and well-being of his workers if any of them were ever injured on the job,” Attorney General Martha Coakley said. “It is the duty of all employers in the Commonwealth to provide the proper insurance coverage for their employees, and our office will continue to hold those accountable who try to avoid that responsibility.”

In November 2009, Coakley’s Office began an investigation into Leonard’s company after the Massachusetts Insurance Fraud Bureau was tipped off to Leonard’s alleged misclassifications by the AIM Mutual Insurance Co. Investigators found that over a four year period between May 2004 and May 2008, Leonard, who owned TLC Exteriors, had allegedly misclassified his workers as carpenters instead of roofers in order to avoid paying higher workers’ compensation insurance premiums.

The proper insurance premiums are calculated by the Workers’ Compensation Ratings and Inspection Bureau which provides these rates based on the risk exposure of work conducted. Authorities allege that Leonard should have paid a higher rate insurance premium because his employees were actually roofing, which is a higher risk job classification.

After being notified of the discrepancy, Leonard allegedly told his insurance company that he had a carpentry business and that any roofing was subcontracted to other businesses. IFB investigators later discovered that Leonard had employed full-time roofers since his first policy with AIM in May 2004 and that as a result of his fraudulent activities, Leonard defrauded AIM of over $107,000 in workers compensation premiums.

Leonard is scheduled to be arraigned in Hampshire Superior Court on July 15, 2010.

Owen Boss can be reached at oboss@gazettenet.com