On June 24, the owner and president of Calif.-based NBC General Contractor Corporation was sentenced to 4 years and prison and ordered to pay $1.2 million in restitution after misrepresenting her company's payroll.
Investigation by the California Department of Insurance (CDI) Fraud Division, Employee Development Department (EDD), the U.S. Department of Labor, and the State Compensation Insurance Fund (SCIF) revealed that Monica Mui Ung, 51, had intentionally misrepresented NBC's payroll and job classifications. In doing so, NBC illegally saved a significant amount in workers' compensation premiums owed to SCIF.
Ung reported incorrect payroll and job classification information for 70 of NBC's employees while the company was involved in public works projects, all of which require compliance with the state prevailing wage law and union requirements. Also involved were Ung's office manager and payroll specialist, who had previously entered guilty pleas in the case.
The investigation also revealed that NBC was not paying certain benefits as required under labor laws, such as prevailing wage, overtime, sick leave, and other statutory benefits. Due to these illegal cutbacks, 43 employees were identified as victims of payroll loss between 1999 and 2008. Many employees feared coming forward previously as they were non-English speakers working as a captive labor force in the “underground economy.”
Additionally, investigators learned that NBC had operated at an advantage after being awarded 27 public works projects between 2003 and 2007 it would not have otherwise earned. The cost of NBC's workers' compensation insurance was determined, in part, by each employee's job classification, and the misrepresentation of this ultimately lowered NBC's estimates for various projects.
Aside from serving jail time, Ung owes $350,000 in restitution pro rata for the individual workers and $850,000 to the SCIF. Her two contracting licenses have been restricted until restitution has been paid and the court approves a reinstatement. Additionally, Ung was sentenced to 10 years felony probation, which may be reduced to as few as 3 years upon full restitution and court approval.
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
Already have an account? Sign In Now
© 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.
