Massachusetts Man Sentenced in Insurance Fraud Scheme with Unnamed Agents

An Andover man was fined $250,000 and sentenced to two years probation on charges of conspiracy, mail fraud and wire fraud in connection with a scheme to fraudulently reduce workers' compensation insurance premiums for his rubbish collection company.

United States Attorney Donald K. Stern, Barry W. Mawn, Special Agent in Charge of the Boston Field Office of the Federal Bureau of Investigation, and Daniel L. Skelly, Chief of Investigations, Insurance Fraud Bureau of Massachusetts, announced today that David Vining of 12 Patriot Drive, Andover, Massachusetts, was sentenced by U.S. District Judge Reginald C. Linsay.

In a previous hearing, Vining pled guilty to a three-count charge that he conspired with two unnamed insurance agents to evade workers' compensation insurance premiums for Vining Disposal, Inc., of which Vining was a one-half owner. The fraudulent scheme included classifying rubbish collection workers as if they were clerical employees, hiding payroll, and using shell corporations to evade surcharges based on the business's prior accident history.

In sentencing Vining, Judge Lindsay noted that ordinarily a sentence of imprisonment would be required, under federal sentencing guidelines, but that he was imposing a lesser sentence due to Vining's substantial assistance to law enforcement authorities. Judge Lindsay further noted, however, that he was imposing a fine at the statutory maximum of $250,000 in order to adequately punish Vining's conduct. In addition, Judge Lindsay ordered Vining to pay $479,504 in restitution to the insurance companies whose premiums Vining underpaid.

The case was prosecuted by Assistant U.S. Attorney Paul Levenson of Stern's Economic Crimes Unit. It was investigated by the Federal Bureau of Investigation with extensive assistance from the Massachusetts Insurance Fraud Bureau.

The investigation is continuing.