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Husband and wife who owned drywall company plead guilty to insurance scheme

They will be sentenced in November.
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Drywall

A husband and wife who owned a construction company have pleaded guilty to duping an insurance company out of more than $300,000.

LeRoy Mehr, 51, and Joyce Mehr, 50, who owned Merit Drywall in Annandale, have been convicted of one count each of theft-by-swindle in a workers compensation insurance scheme.

They intentionally classified certain workers as sub-contractors to avoid having to pay workers compensation insurance premiums, as a result causing a loss of almost $310,000 to Federated Insurance over a 12-month period between April 2016 and 2017.

When they were charged in January, Hennepin County Attorney Mike Freeman said the fraud in this instance was on a level "we rarely see."

"It cheats workers from the healthcare insurance they're entitled to, it cheats insurance companies who are supposed to provide the coverage, and thirdly it cheats companies who compete with the fraudulent corporation, because they can bid cheaper or take more money home," Freeman said.

As part of a plea agreement, the couple face up to 180 days in jail and five years on probation, and must pay Federated the lost premiums.

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