Security company owners charged in workers' comp fraud scheme
The scheme was uncovered while the California Department of Insurance was investigating an unrelated matter involving fake auto insurance claims.
The operators of B&R Private Security LLC are accused of committing insurance fraud by underreported employee payroll by more than $1.6 million, in turn cutting their workers’ comp premiums, according to the California Department of Insurance.
The scheme was uncovered while the state insurance department was conducting a separate criminal investigation and caught wind that B&R was paying employees in cash and only claiming a fraction of its workforce for payroll reporting purposes.
The operators, Luis Burgos and Sohan Singh, reported approximately $192,419 in employee payroll for the period covering May 2018-May 2021. However, an audit found that B&R had more than $1.8 million in employee payroll during that three-year period, according to the state insurance department. The company is alleged to owe $128,978 in unpaid premiums.
The Coalition Against Insurance Fraud reported that workers’ comp sees $34 billion in fraud annually, with about $9 billion of that total coming from premium fraud each year. Claims fraud accounts for as much as $25 billion annually.
Unrelated investigation
Burgos was arrested for his role in the workers’ comp scheme while at the Fresno County Superior Court on an unrelated matter, which also involved insurance fraud.
In August 2020, Burgos was hit with multiple felony counts of insurance fraud and forgery. Four years earlier, Burgos made an informal deal to sub-lease a Lexus to a former employee. He then filed several fraudulent claims involving the Lexus and his personal vehicle against the ex-employee’s insurance policy without their knowledge. Burgos conspired with another individual, who intercepted the checks by impersonating the policyholder and forging their name.
During his 2020, arrest Burgos was also charged with forging medical documents to aid a B&R Security employee in getting additional paid time off from work because of an injury suffered in a car accident.
The California Department of Insurance reported Sohan Singh, Burgos’ co-conspirator in the workers’ comp scheme, is still at large and believed to be out of the country.
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