PHILADELPHIA – The owners of a Philadelphia security business were arrested on Thursday on charges that they failed to carry workers’ compensation insurance – as required by Pennsylvania law.
Attorney General Tom Corbett identified the defendants as Michael Kennedy, 35 of Philadelphia, and Bryan McGraw, 37, of Philadelphia. The two men owned Pro Guard Security, Inc. 8333 Germantown Ave., Philadelphia, which specialized in providing armed security guards to various clients.
Pro Guard Security was incorporated on Jan. 10, 2003 by the Pennsylvania Department of State. Kennedy and McGraw were co-owners of the business until August of 2006, when Kennedy ended his affiliation with Pro Guard and McGraw became sole owner. Kennedy and McGraw are also both Philadelphia Police officers.
The investigation began after allegations surfaced that Pro Guard Security was not providing workers’ compensation insurance for its employees.
According to the court documents, a workers’ compensation claim was filed by Darrell Bey after he was injured while on the job on Dec. 4, 2004. A judge ordered Pro Guard to pay $345 per week, plus additional expenses, to Bey beginning on Dec. 14, 2004.
Additionally, Pro Guard employee Olious Hightower filed a workers’ compensation claim that on Oct. 11, 2005, he was injured while on the job. A judge ordered Pro Guard to pay $358 per week, plus additional expenses, to Hightower beginning on Oct. 11, 2005.
Both Bey and Hightower state that they never received any compensation despite the court rulings in their favor.
According to court documents, state records indicated that Pro Guard carried workers’ compensation insurance with the State Workers Insurance Fund (SWIF) from Jan. 28, 2003 through July 23 2004. From July 24, 2004 until the present, there is no record of insurance and no record indicated that Pro Guard was self-insured.
Additionally, in an attempt to show coverage, a fraudulent insurance policy declarations page from Prime Insurance was presented by Bryan McGraw to the Commonwealth, which led to additional charges being filed against him.
The fraudulent declarations page came from an actual declarations page from Prime Insurance on which alterations to the effective dates of the policy were made without the knowledge or consent of Prime Insurance. McGraw allegedly attempted to show insurance coverage by altering the dates to reflect a period when there was no coverage, which was confirmed by Prime Insurance.
Furthermore, court documents revealed that McGraw had completed an application for workers’ compensation insurance with the Powell Insurance Agency on July 16, 2007. On the application, McGraw stated that he never had a workers’ compensation policy in Pennsylvania, he denied having prior workers’ compensation claims, and he stated that he never had a policy cancelled.
As of August 2007, Pro Guard was still operating in Philadelphia allegedly without workers’ compensation insurance.
Kennedy is charged with 737 misdemeanor counts – one for each day the company was without insurance while he was involved with the business – of failure to carry workers’ compensation insurance.
McGraw is charged with one felony count of forgery, one misdemeanor count of insurance fraud, one misdemeanor count of unsworn falsification to authorities, one misdemeanor count of tampering with or fabricating physical evidence, 1,086 felony counts of failure to carry workers’ compensation insurance, and 1,086 misdemeanor counts of failure to carry workers’ compensation insurance.
Kennedy and McGraw surrendered today and will be arraigned before a Philadelphia bail commissioner.
The case will be prosecuted in Philadelphia by Deputy Attorney General Gregg Shore of the Attorney General’s Insurance Fraud Section.