Workers Compensation Fraud—California

AMOUNT: $144,672 in premiums and $110,462 in payroll taxes

A pair of siblings pleaded no contest to charges of workers compensation fraud and tax evasion. Between July 2010 and July 2013 they underreported the number of employees and payroll in their business in order to avoid premiums and taxes. This left employees and homeowners who hired them at risk for potential financial loss and injuries. Insurance carriers were cheated out of $144,672 in premiums and the state out of $110,462 in payroll taxes. One individual was sentenced to thirty days in county jail, five years of formal probation, and ordered to pay $144,672 in restitution to insurance companies and $110,462 to the Employment Development Department. The sister was sentenced to three years' probation, fifty hours community service, and to share in the restitution of $110,462 to the Employment Development Department.