The owner of Toledo Livery Service, a limousine company, has been ordered to pay restitution to the Ohio Bureau of Workers’ Compensation.
Ibe Nnaji, the owner of the company, misclassified employees as subcontractors and failed to maintain workers’ compensation coverage, state officials said. The actions constitute fraud, the officials said.
Mr. Nnaji pleaded guilty to a disorderly conduct charge Oct. 17 in Toledo Municipal Court. He must pay $13,612.92 in restitution and was sentenced to 30 days in jail, which were suspended for five years of probation.
“As Mr. Nnaji learned, misclassifying employees and failing to maintain coverage can cause concern among competitors who take issue with any unfair advantage these actions may create,” Steve Buehrer, the bureau’s administrator and chief executive officer, said in a statement. “If an employer provides the tools necessary for workers to complete their jobs and controls the work environment, they cannot claim those employees as subcontractors, and doing so purposely constitutes fraud.”
Toledo Livery Service was audited in 2008 after its workers’ compensation policy lapsed in 2007. The company was placed on notice and billed the appropriate premiums. After failing to comply with the state’s notices, Mr. Nnaji was brought up on charges in April, 2010.
Prior to 2003, the company’s employees were categorized differently. When it came to light that Mr. Nnaji changed the way his employees were recorded, the state took action.
A second audit revealed that in addition to failing to renew his coverage, Mr. Nnaji had continually misclassified his workers throughout the previous decade, officials said.
Mr. Nnaji said he thought he was in compliance with state law and did not intentionally commit fraud. He said he accepted a plea deal in order to put the issue behind him.
“We had mixed signals from the state,” he said.
The state said the case involved five employees.
There have been 191 convictions for employer or employee fraud across the state since January, 2011.
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