Miami Contractor Underreported Payroll by $1 Million, Fraud Charge Says

A Miami construction company owner underreported his firm's payroll by almost $1 million and defrauded NorGuard Insurance of more than $100,000 in premiums, according to Florida investigators.

Israel Carballo, head of Carballo Group LLC, was arrested Nov. 5, court records show. He pleaded not guilty and was released on bond. He now faces charges of theft and workers' compensation fraud.

The case turns on the gap between two numbers: $9,300 and $109,863.

How the alleged scheme worked

A Florida Department of Financial Services investigator found that in 2023 Carballo purchased workers' compensation coverage from NorGuard, a Berkshire Hathaway company. He claimed a relatively small number of workers. That claim kept his premium at about $9,300 for the policy year.

Workers' compensation premiums scale with payroll. Report fewer workers or lower wages, and the premium falls. The trade-off is simple: the insurer prices the policy against a risk that does not match reality.

The DFS investigator subpoenaed records from subcontractors. Those records showed Carballo Group had actually paid some $1,074,000 to workers, the arrest affidavit attests. The true payroll was roughly 100 times what the modest premium implied.

Had Carballo correctly reported his company's payroll, the annual premium would have been $109,863, the investigator said in the affidavit.

What the check-cashing detail shows

The investigation also found that Carballo had used check-cashing services to cash checks, presumably to pay workers in cash.

That detail matters for the mechanics of the case. Cash payments leave a thinner paper trail than bank deposits. Subpoenaed subcontractor records, not Carballo's own books, exposed the true payroll figure.

What happens next in court

Carballo has claimed indigent status. That claim could qualify him for a court-appointed attorney or public defender.

Florida Secretary of State corporation records add another wrinkle. Carballo Group was registered as a corporation in 2023, but the state agency dissolved it after the company failed to file an annual report in 2025. The firm no longer exists as an active corporation while its former head fights criminal charges tied to its operations.

Why the numbers carry the case

The alleged fraud rests on three documented figures: a $9,300 premium actually paid, a $109,863 premium that should have been paid, and $1,074,000 in actual payroll. The difference between the first two numbers — more than $100,000 — is the loss NorGuard absorbed, according to the Department of Financial Services.

For contractors, the case shows how state investigators can reconstruct payroll from third-party records when an insurer's policy file looks thin. Subcontractor subpoenas closed the gap here.

Carballo's next court appearances will determine whether the case goes to trial or ends in a plea. The charge of workers' compensation fraud carries consequences that now extend beyond premiums to the owner's personal liberty.