Former owners of Annandale drywall company plead guilty to theft-by-swindle
The former owners of an Annandale drywall company have pleaded guilty to in connection to a scheme involving worker’s compensation insurance.
According to the Hennepin County Attorney’s Office, LeRoy and Joyce Mehr pleaded guilty to one count of theft-by-swindle.
The couple is expected to be sentenced on Nov. 23.
According to a criminal complaint, the Mehrs defrauded workers’ compensation providers by misclassifying employees as independent contractors.
When the company was audited by Federated Insurance to review their workers’ compensation policy, Joyce Mehr provided records that falsely claimed their business had 11 employees, while dozens of workers were independent subcontractors, according to the complaint.
During its investigation of Merit Drywall, the Commerce Fraud Bureau used confidential informants. One informant told investigators he didn’t need to provide identification to work for the company and that he was always paid in cash. Another informant said Joyce Mehr had set him up with a company email address and created a business for him by registering a company name with the Minnesota Secretary of State.
The complaint said the Commerce Fraud Bureau was able to find three companies that Joyce Mehr had paid for online.
When the Commerce Fraud Bureau executed a search warrant at Merit Drywall, investigators were unable to find contracts between the company and independent contractors. Instead, investigators found invoices from employees the company had classified as independent contractors, according to the complaint.