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Asbestos-removal company owner arrested on failure to pay $1.6M in workers’ comp premiums

Posted on Jul 31, 2009

Four years: that is how long a New York asbestos-removal company owner has been sentenced to jail for not paying $1.6 million in workers’ compensation premiums. The owner, Chong-mun Chae, is also an illegal immigrant, so he will be deported after serving a 46-month sentence.

Mr. Chae was able to cheat the system by repeatedly changing the name of his company. He also falsely claimed that he only employed one worker, a receptionist. Some names he used for his company include Top Ace Services, K-One Services, and Charlie Brown Services.

The hazardous nature of asbestos removal work would have meant much higher premiums for Mr. Chae’s business if he had reported the true number of employees working for him and the nature of their work. Instead, Chae risked his workers safety on asbestos removal projects across the state, often employing Korean immigrants he claimed were independent contractors.

Chae pleaded guilty to mail fraud and tax fraud and was sentenced last week in the US District Court in Binghamton. As a condition of his plea agreement, he must pay back insurance premiums that he should have been paying all along. The New York State Insurance Fund is to receive $1,067,265, Zurich Insurance will get $345,904, and Princeton Insurance will get $238,187.