N.C. man pleads guilty to $2.7 million fraud against Avon Park firm

A North Carolina man pleaded guilty Monday to defrauding an Avon Park company out of $2.7 million over three years, according to a media release from Wifredo Ferrer, the U.S. attorney for the Southern District of Florida.

Carl Dale Fuller pleaded guilty to mail fraud. Fuller, 52, lives in Wake Forest, N.C., a small suburb of Raleigh.

Fuller posed as David Walters while defrauding National Employer Services, "a Professional Employer Organization providing cost-effective services for businesses that out-source employee benefits, payroll, workers compensation and other human resource functions," according to the release.

The media statement also came from Jeff Atwater, chief financial officer of the Florida Department of Financial Services, and John V. Gillies, special agent in charge of the FBI field office in Miami.

The fraud began in May 2005 and continued through August 2008. Early in 2005, NES learned "that its worker compensation policy was being cancelled," according to a U.S. District Court document filed by Richard A. Miller, another FBI special agent.

In March, the company contacted Al Brown, an insurance broker in Charlotte, N.C., who contacted Fuller, "who Brown believed" operated a company similar to NES.

"Fuller referred Brown to David Walters, who operated Southeast Services. Brown advised that he never personally dealt with Walters and always went through Fuller," the document continued.

Brown then introduced NES to Walters and NES sent Brown $130,000, which he forwarded to Southeast Services.

"NES then sent regular premiums" through Federal Express to an address in Myrtle Beach, S.C. In return, Southeast Services sent NES certificates of insurance (proof of workers compensation coverage) via emails and fax."

The certificates show that the coverage was supposed to be with Association Casualty Insurance, but Association representatives "affirmed they have no relationship with Carl D. Fuller, David Walters or Southeast Services," the documents continued.

Fuller, however, did pay "at least $437,852 in worker's compensation claims to perpetuate the fraud," Miller wrote.

The payments to Fuller totaled $2,716,537.

The fraud came to light on Aug. 28, 2008, when "NES was notified that one of the employees of its client companies was seriously injured on the job and Southeast Services had failed to pay any of the related claims. Repeated attempts to contact Walters via email, fax and telephone were unsuccessful," the documents stated.

Meanwhile "a complaint filed with the Florida Department of Financial Services, Consumer Services Division, determined that NES was in violation of Florida statute 440.10(g) for not having a valid worker's compensation policy for the last three years."

Miller launched an investigation and tied the South Carolina mail drop box address to Fuller, "the account's sole signatory."

On June 3, Miller interviewed Fuller at Fuller's home. "Fuller denied any involvement in this scheme and directed all blame to Walters, who he has not had contact with for several years," Miller wrote in a court document dated June 9.

Fuller couldn't explain why the bank and drop box accounts were traced "directly to him," nor why "the FBI received complaints about him in 2003 from businesses in New Jersey and New Mexico for similar activity," Miller stated.

U.S. District Judge Donald L. Graham will sentence Fuller on Feb. 10. He faces up to 20 years in prison, a $250,000 fine and "a mandatory order for restitution in the amount of at least $2.7 million," the release stated.

Assistant U.S. Attorneys Ellen Cohen and Emalyn Webber prosecuted the case.