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Massachusetts Man Convicted Of Mail Fraud in Comp Case

A Peabody, Mass., resident was convicted in federal court of mail fraud in connection with a scheme to fraudulently reduce the workers' compensation insurance premiums he paid by providing false information to insurance companies.

Arthur L. Pimental was convicted by a jury sitting before U.S. District Judge Nancy Gertner of two counts of mail fraud. The jury acquitted Pimental's wife, who was also on trial.

Evidence presented during the five-day trial proved that Pimental operated a construction business known at various times as Pimental Steel Erectors and A.P.S. Products Inc. According to prosecutors, Pimental engaged in a scheme to defraud the insurance companies that were providing workers' compensation insurance to his business by falsely representing that he was engaged in concrete construction, when in fact he was primarily engaged in the erection of structural steel. The erection of structural steel is considered a much riskier type of construction work, and therefore subject to higher workers' compensation insurance premiums.

The evidence also established that PIMENTAL under-reported the payroll he was paying his employees, which was another factor in determining workers' compensation insurance premiums. Pimental avoided paying at least $300,000 in workers' compensation insurance premiums to three insurance companies over a period of five years.

Judge Gertner scheduled sentencing for Jan. 6, 2003. Pimental faces five years in prison, to be followed by three years of supervised release, a $250,000 fine, and restitution to the insurance companies on each of the two counts.

The case was investigated by the Federal Bureau of Investigation and the Insurance Fraud Bureau of Massachusetts. It is prosecuted by Assistant U.S. Attorney Mark J. Balthazard from the Economic Crimes Unit.

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