A Rockville Centre business owner and his Queens-based iron and erection construction company were sentenced for insurance fraud and underpaying $600,000 in policy premiums.
According to the charges, annual audits by the New York State Insurance Fund (NYSIF) Premium Fraud Investigators revealed that Mahendranauth Khargie, 36, and his company, GC Stud Inc., substantially underreported the total amount of their payroll during three policy periods between April 2019 and March 2022, resulting in premium fraud.
As a NYSIF Workers’ Compensation policyholder, Khargie and his company are required to provide financial records concerning income and employee payroll to NYSIF every year the policyholder renews its coverage.
Records revealed that large payments to the defendants were made by three different steel and iron fabrication companies during the time of the investigation. The defendants hid the money, deposited the funds in a JPMorganChase account, and did not provide that account to the NYSIF premium auditors.
Over the course of the scheme, Khargie underreported his payroll to NYSIF by more than $3.5 million, resulting in underpayments of the company’s Worker’s Compensation policy premiums.
Khargie was arrested on September 4, 2025, in Mineola by members of the Nassau County District Attorney’s Detective Squad.
Khargie, 36, and GC Stud Inc. pleaded guilty on October 21, 2025, before Judge Robert Schwartz, to Insurance Fraud in the Third Degree (a Class D felony). GC Stud, Inc., also pleaded guilty to Effect of Failure to Secure Compensation under the New York Workers’ Compensation Law (a Class E felony). They were both sentenced on December 2, 2025, to a Conditional Discharge and made a full restitution payment of $625,000 to the New York State Insurance Fund (NYSIF).
If Khargie had failed to pay the restitution for the lost premiums in full, he faced a prison sentence of two to six years.
“This company underreported millions of dollars of payroll, allowing them to dodge $600,000 in insurance premiums that every other honest employer has to pay,” said Nassau County District Attorney Anne Donnelly. “This sentence holds the defendant and his company accountable, forcing them to pay what they owed all along. These kinds of schemes hurt workers and undercut businesses that follow the rules. My office will continue to call them out and make them pay their fair share or face prison time.”
“The restitution paid should serve as a deterrent to any business attempting to cheat the workers’ compensation system,” said NYSIF Executive Director and CEO Gaurav Vasisht. “I appreciate the partnership of Nassau County DA’s office to prosecute this case.”