Contractors face charges over filing false insurance documents to obtain licenses

Four local contractors face insurance fraud charges after allegedly lying about their coverage to obtain home improvement licenses, Nassau County District Attorney Anne Donnelly said Friday.

The four contractors facing felony charges are Fabio Salazar, 52, of Maspeth, owner of Always First Restoration in Queens; Michael Kaffash, 40, of Woodmere, owner of Kingspoint Builders LLC in Hempstead; Jonathan Mendel, 45, of Cedarhurst, owner of JRM Development LLC in Lawrence; and James Fernandes, 39, of Carle Place, owner of Braga Industries in Carle Place.

The district attorney's office alleges the contractors tried to deceive the county on their applications for licenses, including by altering policy expiration dates to show active insurance, submitting policy numbers or addresses belonging to other companies or submitting false coverage information, according to prosecutors.

Salazar denied any wrongdoing in a phone interview with Newsday on Friday. He said a company in India he hired to complete administrative tasks submitted incorrect information when it filed for a license renewal for his company. His insurance broker also failed to communicate that his coverage lapsed, Salazar said.

If the county would have brought the issue to his attention, Salazar said he would have fixed the issue immediately, but instead of suspending his license or issuing a fine, the district attorney's office charged him with multiple felonies.

"I just think they went overboard, and they're trying to crucify me for this," Salazar said.

Kaffash told Newsday the charges were the result of a misunderstanding.

Mendel declined to comment before speaking with his attorney.

Fernandes could not immediately be reached on Friday afternoon.

Home builders have highlighted the rising cost of liability and workers' compensation insurance among the factors driving up the cost of home building and improvement projects on Long Island.

Enforcement of the county's licensure rules levels the playing field among contractors and ensures companies that flout the rules don't gain an advantage over licensed firms, said Mike Florio, CEO of the Long Island Builders Institute in Melville

"Insurance fraud hurts legitimate contractors and ultimately hurts consumers," he said.

The charges were the result of a multiagency investigation, including the Nassau County Department of Consumer Affairs, the New York State Workers' Compensation Fraud Inspector General and the state Department of Financial Services.

"Insurance fraud drives up costs and undermines the integrity of New York's insurance market," said Kaitlin Asrow, acting superintendent at the Department of Financial Services, which regulates the insurance industry. "DFS is committed to working alongside our law enforcement partners to hold bad actors accountable."

Salazar, Kaffash and Mendel were charged with criminal possession of a forged instrument in the second degree, offering a false instrument for filing in the first degree and effect of failure to secure compensation under the New York Workers' Compensation Law.

Fernandes was charged with offering a false instrument in the first degree and effect of failure to secure compensation under the state Workers' Compensation Law.

All four pleaded not guilty earlier this week and were released.

If convicted, Salazar, Kaffash and Mendel could face 2⅓ to 7 years in prison, and Fernandes could face 1 to 4 years in prison, according to the DA's office.

Nassau County requires contractors who remodel residential homes to obtain a county license and to show proof of liability and workers' compensation insurance. The county charges a $650 fee to obtain or renew the two-year license.

By Jonathan LaMantia

jonathan.lamantia@newsday.com@jonlamantia

Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.