A West Palm Beach storefront was used as the base for a $12.5 million construction fraud operation built around shell companies, workers’ compensation certificates, and cash moving through the local construction industry, investigators said.
The operation was based out of MLS Paralegal Services in a shopping plaza at 2601 S. Military Trail, according to CBS12 News, which reported on an arrest affidavit filed in Palm Beach County Circuit Court. CBS12 also published the affidavit as a PDF.
Investigators said the group used at least seven interconnected shell companies and a workers’ compensation fraud method known as “certificate renting.” In that type of scheme, paperwork can make a company look insured while the actual workers on a job are not properly reported under the policy.
The suspects have not been convicted. The charges are accusations and have not been proven in court.
Investigators Said the Storefront Was the Hub
CBS12 reported that investigators with the Broward Sheriff’s Office Money Laundering Task Force and the Palm Beach County Sheriff’s Office identified 36-year-old Marlen Suazo Gutierrez as the head of the operation.
The affidavit described MLS Paralegal Services as both the management base and the cash hub for the network. Investigators said the storefront appeared ordinary from the outside but functioned as an illegal, unregistered money service business and the office where paperwork for the shell companies was coordinated.
The companies included DMF Construction Services and Ace Concrete & Pavers, according to CBS12. Investigators said all of the linked corporate entities used the same mailing address at a West Palm Beach storage unit complex.
During the undercover investigation, surveillance teams watched heavy backpacks and trash bags believed to contain cash being dropped off at the office, CBS12 reported.
The Scheme Used Workers’ Comp Certificates, Investigators Said
Investigators said the group bought minimum workers’ compensation policies in 2021 while claiming the covered businesses had only a few office workers.
Those certificates were then rented to uninsured subcontractors for a fee, according to CBS12’s summary of the affidavit. Investigators said that allowed subcontractors to show proof of coverage and get onto commercial job sites while hiding the real workforce from regulators.
The affidavit said the setup handled more than $12.5 million in hidden cash, CBS12 reported.
The Florida Division of Workers’ Compensation says contractors must make sure subcontractors have the required workers’ compensation coverage before work begins on a project. The state also provides a public Proof of Coverage database that can be used to check coverage.
Family Members Were Accused of Cashing Payroll Checks
Investigators said the network relied on family members and associates to cash payroll checks at local storefronts and keep money moving outside ordinary banking channels.
Gustavo Lara Suazo, identified by CBS12 as Marlen Suazo Gutierrez’s son, is accused of cashing more than $1.1 million in payroll checks. Investigators also said he appeared on payroll for multiple companies at the same time and, at one point, claimed to work 170 hours in a 168-hour week.
Alejandra Lagos Matute is accused of working with Gustavo Lara Suazo to cash more than $1.3 million. CBS12 reported that undercover teams also captured the pair cashing an additional $3.4 million for MDA Concrete Inc., a company registered in Matute’s name.
Blanca Cecilia Ramirez Farina, who was reportedly listed as president of JNJ Construction Services Inc., is accused of manipulating payroll data to avoid insurance premiums. Investigators said the premium avoidance was nearly $168,000 for one policy period.
Erick Blandon was accused of helping run the day-to-day operation at the West Palm Beach office with Eduardo Blandon Martinez, who CBS12 identified as Marlen Suazo Gutierrez’s husband and Gustavo Lara Suazo’s stepfather.
Charges Included Fraud and Unauthorized Money Service Counts
CBS12 reported that Marlen Suazo Gutierrez, Gustavo Lara Suazo, Alejandra Lagos Matute, Blanca Cecilia Ramirez Farina, and Erick Blandon were booked Thursday on counts that included organized scheme to defraud over $50,000, workers’ compensation fraud over $100,000, and operating an unauthorized money service business over $100,000.
The investigation included court-authorized GPS tracking devices on suspects’ vehicles, according to the report.
Investigators said the case took an unusual turn when Marlen Suazo Gutierrez, Gustavo Lara Suazo, and Eduardo Blandon Martinez realized they were being watched. CBS12 reported that the trio used their own vehicles to block in an unmarked police unit and called 911 to report a suspicious vehicle, unknowingly bringing officers to the undercover detectives.
State officials are continuing to audit financial and insurance records tied to the network, according to CBS12.
Customers Should Not Rely on a Certificate Alone
For homeowners, small contractors, and project managers, the practical issue is that a certificate of insurance is only a starting point. A certificate should match the company doing the work, the policy period, the type of work, and the business name on the contract.
Florida’s Division of Workers’ Compensation provides a Proof of Coverage database and an Exemption Search. The state’s coverage portal also allows users to submit noncompliance referrals when a business appears to lack required coverage.
Before hiring a contractor or allowing a subcontractor onto a job, customers and project managers can ask for the company’s legal business name, license information, liability insurance, workers’ compensation carrier, policy number, and certificate holder details. They can also call the insurance producer or carrier directly and check state records instead of relying only on paperwork handed over by the contractor.
Red flags include a different company name on the certificate, a policy covering only office staff, a certificate that does not match the crew or business on site, pressure to start before coverage is verified, unusually low bids, cash-only payment demands, or a third-party storefront handling payroll and insurance paperwork without a clear role in the job.
Suspected workers’ compensation fraud in Florida can be reported to the Bureau of Workers’ Compensation Fraud through FraudFreeFlorida.com or the Insurance Fraud Hotline at 1-800-378-0445. Workers’ compensation coverage and exemption questions can also be directed to the Division of Workers’ Compensation at 1-800-742-2214.