California contractor fesses up to workers' comp fraud charges

A Benicia, California contractor pleaded guilty to six charges of insurance fraud and grand theft after it was discovered he had underreported payroll by nearly $1 million in order to reduce his workers’ compensation premium, according to the California Department of Insurance.

Kent Bo Fridolfsson, who was the former president and owner of construction firm Diversified Specialists and a state-licensed contractor since 1986, was placed on formal probation, ordered to pay $725,000 in restitution and had to surrender his contractor’s licenses, the insurance department reported.

Diversified Specialists had coverage placed with State Fund from 2010-2021, during which the company was required to report payroll. However, from 2010-2019, Fridolfsson reported zero payroll to State Fund.

In January 2019, an employee with Diversified Specialists was injured on the job and subsequently contacted State Fund. This claim sparked a site inspection of Fridolfsson’s business by the Contractors State Licenses Board, which also interviewed a number of the company’s employees.

A joint investigation, conducted by the insurance department, Solano County District Attorney’s Office and California’s Employment Development Department, found Fridolfsson had underreported payroll by $989,823, in turn shortchanging State Fund $382,104 in premiums, the insurance department reported.

The underreported payroll also resulted in approximately $347,520 in unpaid payroll taxes.

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