Minnesota contractor pleads guilty to insurance fraud after nail injures employee's eye

A construction boss from Princeton, Minn., has pleaded guilty to charges of workers' compensation insurance fraud stemming from an incident when a nail struck an employee's eye.

Nelson Israel Lopez Giron, the owner of wood-framing firm Giron Construction, entered his plea Oct. 2 to criminal charges the Hennepin County Attorney's Office filed in Hennepin County District Court back in April following a Minnesota Commerce Fraud Bureau investigation.

Lopez Giron, who could not be reached for comment, is a prolific builder who worked for MWF Properties, Dominium, Enclave, Roers Cos., Sherman Associates, Trident and other sizable developers around the Twin Cities. He and his crews have helped build apartment complexes such as the Rosemary Apartments in Hugo, Oaks Landing in New Brighton, Anchor View Apartments in North St. Paul and the Risor Apartments in Maple Grove.

According to his plea agreement, Lopez Giron admitted to defrauding his workers' compensation insurance company and submitting false information in an effort to distance himself from the worker who was hurt on one of his construction sites while trying to hammer a nail into wood in October 2019.

Under the plea, Lopez Giron has requested to serve 30 days in prison and three years of probation while also agreeing to forgo all future state and federal construction contracts. His sentencing is Dec. 4.

According to the state's initial lawsuit, Lopez Giron initially offered the injured worker eye drops. When forced to allow the man to seek medical treatment, Lopez Giron told the worker to lie about where and how the injury happened.

The worker, who suffered permanent eye damage and spent more than a year out of work, was subsequently denied workers' compensation benefits after Lopez Giron claimed the worker was not his employee.

In an effort to save money, Lopez Giron had previously told his insurer and the state he had no employees. But a state investigation found Giron Construction had 15 direct employees on the jobsite the day of the injury. Bank and insurance records further revealed the firm had a payroll of $120,000 to $2 million around the time the incident occurred, court documents said.

The state investigation found Giron Construction should have paid more than $20,500 a year in workers' compensation premiums instead of the $671 minimum Giron paid to secure a bare-bones insurance policy, the criminal complaint said.

Co-workers and activists with the community group Centro de Trabajadores Unidos en la Lucha (CTUL) helped support the injured worker and his family financially while he underwent numerous medical treatments

"Labor brokers like Nelson Lopez Giron use misclassification as a way to cut costs and win contracts, leading to severe abuses of workers' rights, including wage theft, dangerous working conditions, and at the extreme, labor trafficking," said Merle Payne, CTUL co-director. "In this case, a nail struck the eye of a worker, and the labor broker attempted to cover it up by offering the worker eye drops. How many other human rights violations go hidden in the shadows of projects of these large developers?"

CTUL, various unions and Minnesota Attorney General Keith Ellison, have engaged in a campaign to expose and prosecute subcontractors that violate labor laws. The Legislature enacted two laws this year that strengthened protections for construction workers, including some who are immigrants without legal status or don't speak English.

One law creates harsher penalties for labor trafficking, and the other, for the first time, allows for the direct suing of large general contracting firms and developers should their subcontractors fail to pay proper wages and benefits as the law requires.