A Calif. businesswoman surrendered to police after underreporting her company's payroll to Redwood Fire & Casualty Insurance Company (Redwood), where she had purchased workers' compensation insurance.

Teresa Reif, 31, is the owner of Genesis Building Services, Inc., which operates a janitorial and pest control company in the Bay Area. In 2008, Redwood allegedly received conflicting statements from Genesis in regards to the number of employees the company had.

As it turns out, Genesis had misrepresented about $544,440 in employee payroll, and Redwood referred the suspected fraud to the California Department of Insurance (CDI). The truth was that Genesis employed more than 140 staffers, and yet only reported less than half of them to insurance carriers.

An investigation by the CDI Fraud Division discovered that from 2005 to 2009, when Genesis had purchased workers' compensation insurance from Redwood, the company allegedly underreported $10,567,776.69 in payroll. In doing so, Reif avoided paying $2,957,089.20 in an insurance premium.

The only compensation Reif will be receiving for her intricate, yet fraudulent work is hard time. The case is currently being prosecuted in the San Mateo County District Attorney's Office, and she faces a $50,000 fine and/or up to 5 years in prison.

Source: www.insurance.ca.gov

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.