Authorities arrested Los Angeles, Calif. business owner Emmett Timothy Kennedy III, 47, on May 12, charging him with dozens of counts of insurance fraud after Kennedy allegedly underreported his company's payroll.
In 2007, the State Compensation Insurance Fund (SCIF) suspected Kennedy's company, WWC Window Cleaning, to have been committing premium fraud. The California Department of Insurance (CDI) began an investigation, and in 2009 it obtained a search warrant to collect WWC's financial records. The CDI discovered that WWC was underreporting the number of employees at the company to the SCIF and the Employment Development Department (EDD).
As it turns out, WWC had been paying part or all of each employee's salary in cash, allegedly under Kennedy's direction. This action defrauded the SCIF and Unemployment Insurance fund of more than $1 million in a mere 4 years.
“The actions of this business owner put his employees at severe risk, had an accident occurred in the workplace,” said Calif. Insurance Commissioner Dave Jones. “The underreporting of his payroll shows an extremely blatant disregard for the welfare of his employees and the law.”
Kennedy now faces 46 counts of insurance fraud and four counts of violating the Unemployment Insurance Code. Each of the 46 counts carries a possible 5 years in prison. The court set his bail at $1 million.
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