A Patchogue asbestos removal company owner and his business have been charged with workers’ compensation insurance fraud after allegedly misrepresenting the company’s workforce, payroll and job hazards, resulting in $163,561 in underpaid insurance premiums, Suffolk County prosecutors said.
Joseph Arthurs, 56, of Patchogue, and VGN Enterprise Corporation were arraigned Wednesday, Sept. 9, on two felony charges, according to Suffolk County District Attorney Raymond Tierney.
Prosecutors said Arthurs is the principal owner of VGN, an asbestos removal company based in Patchogue.
In March 2023, Arthurs allegedly applied for workers’ compensation insurance through Wesco Insurance Company, seeking coverage from April 2023 through April 2024. Prosecutors said he reported that VGN had only one employee, a full-time building service contractor with an annual payroll of $50,000.
Based on that information, Wesco issued the company a policy with an annual premium of $4,203, prosecutors said.
An investigation by the New York State Inspector General’s Office later determined that Arthurs had obtained a state Department of Labor asbestos license or certification and had filed multiple asbestos project notifications, according to prosecutors.
Investigators alleged those records showed VGN was performing asbestos abatement work involving a higher level of workplace hazard and requiring workers’ compensation coverage classified for that work.
The investigation also allegedly found that VGN employed multiple workers during the policy year and had an annual payroll of $354,112.
Prosecutors said the alleged misrepresentations resulted in VGN underpaying $163,561 in workers’ compensation insurance premiums.
“Underrepresenting employees on workers’ compensation insurance means undercutting their safety,” Tierney said.
Arthurs was arrested Aug. 25 and issued a desk appearance ticket. Arthurs and VGN were arraigned before District Court Judge Alonzo G. Jacobs on charges of penalties for fraudulent practices and effect of failure to secure compensation, both Class E felonies.
Jacobs released Arthurs on his own recognizance. Prosecutors said the charges are not bail-eligible under current New York law.
Arthurs and VGN are due back in court Sept. 21.
The case is being prosecuted by Assistant District Attorney Ryan Hunter of the Financial Crimes Bureau. The investigation was conducted by the Suffolk County District Attorney’s Detective Investigation Unit with assistance from the New York State Inspector General’s Office.
The charges are accusations, and the defendants are presumed innocent unless proven guilty.
