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Manhattan temp agency owner accused of $25M workers’ comp fraud

A business owner could face up to 25 years in jail for his part in what officials believe could be the biggest workers’ comp premium fraud case in this history of the NY State workers’ comp board.

The owner of GT Systems, a temporary staffing agency, is accused of establishing one insurance policy after another under false names and pretenses, misclassifying his workers in order to save money on premiums, failing to pay up on his policies so they would cancel, and misrepresenting the payroll for his companies to save on insurance premiums.

This fraud and deception went on for many years, and the owner, Eric Goldstein, 61, is estimated to have cheated the New York State Insurance Fund out of over $25 million in unpaid premiums.  The company, GT Systems, was a back-office operation comprised of 50 temp placement agencies.  GT Systems acted as the umbrella firm tying them all together.

Goldstein’s actions came to light during a joint investigation by the New York State Insurance Fund and the Manhattan District Attorney’s Office.  The fraud had been going on for years, and the size and scope of Goldstein’s deception makes this a case for the record books.

Goldstein has been charged with insurance fraud, forgery, offering a false instrument for filing, and fraudulent practices.

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