BOSTON — A Hopkinton couple is facing federal charges in connection with separate schemes to allegedly defraud their workers’ compensation insurance carriers, the Small Business Administration (SBA) and their mortgage lender.
Ronaldo Solano, 51, and his wife, Adriana, 40, who own Framingham-based H&R Roofing & Construction and H&R Roofing & Siding, were indicted by a federal grand jury in Boston on one count of conspiracy to commit mail and wire fraud, and one a charge of conspiracy to commit bank and wire fraud.
Ronaldo Solano faces two additional counts of mail and wire fraud, according to a news release from the Massachusetts U.S. Attorney’s Office.
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According to the indictment, between 2012 and 2020, prosecutors accuse the Solanos of evading more than $627,000 in workers’ compensation insurance premiums by failing to report payrolls and paying workers through a shell company.
The Solanos appeared Wednesday in U.S. District Court before Chief Magistrate Donald Cabell. The couple did not appear in court to allow them to find a lawyer, but each was appointed a lawyer on a temporary basis.
Prosecutors allege the couple underreported wages to insurance companies
Neither of the attorneys assigned to the couple, Brendan Kelly and John Palmer, returned requests for comment. Kelly, of the Boston-based Federal Public Defender’s Office, is temporarily representing Ronaldo Solano; Palmer, also a Boston-based attorney, represents Adriana Solano.
Assistant U.S. Attorney Kristen A. Kearney of the Securities, Financial and Cyber Fraud Division is prosecuting the case.
U.S. prosecutors allege the Solanos defrauded workers’ compensation insurance carriers.
In Massachusetts, state laws require employers to obtain workers’ compensation insurance coverage so that workers who suffer work-related injuries can be compensated. As with other forms of insurance, employers pay premiums to insurance companies and are then covered for a specified period.
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Premium payments are based on factors related to the degree of risk the insurance company assumes. These include: employee salaries to be covered; nature of the employees’ work; and the employer’s history of work-related injuries.
At the beginning of the policy term, the employer is required to provide the insurance carrier with a forecast of expected wages during the upcoming policy term, as well as information regarding employee job classifications. They are used to determine an estimated premium that the employer may be required to pay in part or in full before or during the policy term.
Prosecutors allege that sometime around February 2012 and at least through February 2020, the Solanos underreported payroll to their two Framingham companies and instead paid employees through a shell company. By doing so, the Solanos were able to avoid paying approximately $627,000 in insurance premiums, prosecutors said.
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Separately, the US attorney general’s office alleges that in 2021 and 2022, the Solanos applied for a loan on behalf of H&R Roofing & Siding Corp. to the Small Business Administration’s Economic Injury Loan (EIDL) program, which provides COVID-19 pandemic relief under the Coronavirus Relief, Assistance, and Economic Security (CARES) Act.
In their application, the Solanos are said to have requested $2 million in assistance for working capital and other business expenses. After receiving the grant funds, the couple allegedly transferred $1 million of it into a personal bank account, from which they allegedly paid an $825,000 down payment on a home in Hopkinton.
In addition, prosecutors say the couple borrowed another $770,500 from a mortgage lender to finance the purchase of the Hopkinton home, but failed to disclose to the lender that they used EIDL funds for their down payment.
The charge of conspiracy to commit mail fraud and wire fraud carries a sentence of not more than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross profit or loss, whichever is greater. The charge of conspiracy to commit bank fraud and bank fraud carries a sentence of not more than 30 years in prison, five years of supervised release and a fine of $1 million or twice the gross profit or loss, whichever is greater.
The mail fraud and wire fraud charges carry a sentence of no more than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross profit or loss, whichever is greater.
Ronaldo and Adriana Solano were released on the condition that their lawyers inform the consulates of the charges. The two are scheduled to be arraigned remotely on March 25 before Magistrate Judge M. Page Kelly.
This article originally appeared in the MetroWest Daily News: Hopkinton couple faces mail and wire fraud charges from AG’s office