Alpha Omega Realty in Rockland County allegedly applied for workers compensation insurance for one employee in 2016, Charter Oak Fire Insurance Co. says in a lawsuit, but actually employed more than 90 people and avoided nearly $1.5 million in premiums.
Charter Oak is suing Alpha Omega and its owner, Anthony Frascone, for fraud in U.S. District Court, White Plains, and is demanding the premium that was never paid, according to a Feb. 3 complaint.
Frascone and Alpha Omega “knew the representations were false,” the complaint states, and made them “with the intent of fraudulently inducing Charter Oak to issues its policy of insurance at a reduced and inaccurate premium amount.”
The lawsuit mirrors allegations in an indictment filed last month by Rockland District Attorney Thomas Walsh accusing Anthony P. Frascone, 51, of Congers, of grand larceny and insurance fraud.
Charter Oak, of Hartford, Connecticut, says it issued a workers compensation and employer liability policy for November 2016 to November 2017. The policy covered Alpha Omega Realty, of Spring Valley, and Alpha Omega Building Consulting Corp., of Congers.
Workers compensation insurance provides cash or medical benefits for workers who are injured or become ill as a direct result of their jobs, and in New York nearly all businesses are required to provide the coverage.
The insurance policy premium is based on an applicant’s “actual exposure,” the nature of the work and the number of workers, according to the complaint. So based on a $40,000 payroll for one real estate employee, according to the indictment, the annual premium was $403.
But the Alpha Omega companies were general contractors on New York construction projects and employed more than 90 people, the complaint states. They should have paid $1,498,748 for the coverage.
Charter Oak accused the defendants of breach of contract and fraud, and it is demanding restitution for the value of insurance coverage provided.
Manhattan attorney Thomas A. Martin represents the insurer.
New City attorney Lawrence A. Garvey, who represents Frascone and Alpha Omega, did not respond to a message asking for their side of the story.
The New York Department of Taxation and Finance says Alpha Omega Building Consulting Corp. owes the state even more money. The state ranks it as the second worst delinquent business taxpayer for unpaid sales and use, corporate, and withholding taxes.
Anthony P. Frascone and Anthony J. Frascone Jr., of Armonk, owe more than $16.3 million, the state asserts, as the individuals responsible for Alpha Omega taxes.