"Businesses that illegally underreport payroll and employees create a competitive advantage that places honest businesses at risk," Insurance Commissioner Ricardo Lara said in a statement. "This joint investigation with Amador County levels the playing field, so honest employers have a chance to stay competitive and in the marketplace." (Credit: designer491/Shutterstock)
Michael Zendejas was sentenced to 180 hours of community service, three years formal probation and ordered to pay $944,718 in restitution after pleading no contest to insurance fraud for underreporting payroll by approximately $4.9 million that resulted in a $944,718 loss to his insurer, according to the California Department of Insurance.
As the owner and president of Trinity Personnel Inc., an employment agency that provides temporary workers, Zendejas obtained a workers' compensation policy from State Compensation Insurance Fund (SCIF) in September 2014 through December 2016. SCIF performed an audit of the policy and found that Zendejas significantly underreported the company's payroll and the number of employees in order to receive a lower workers' compensation insurance premium.
A joint investigation with the California Department of Insurance and the Amador County Workers' Compensation Fraud Unit found Zendejas provided SCIF with fraudulent Employment Development Department and payroll documents result in the loss in insurance premiums to his insurer.
"Businesses that illegally underreport payroll and employees create a competitive advantage that places honest businesses at risk," Insurance Commissioner Ricardo Lara said in a statement. "This joint investigation with Amador County levels the playing field, so honest employers have a chance to stay competitive and in the marketplace."
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Denny Jacob
Denny Jacob is an associate editor for NU PropertyCasualty360. Contact him at [email protected].
