A California man has pleaded no contest to insurance fraud and will serve 40 days in jail after misreporting the number of employees that were working to his workers' compensation insurer. A tip received by the District Attorney's Offices Workers' Compensation Fraud Unit disclosed that the fraudster had told his workers' compensation insurer, State Compensation Insurance Fund, that he had zero employees working for him at his establishments, Sal's Alley Side Care and Carbone's Bar, between August 2014 and August 2015. Investigators obtained records and interviewed key participants, including the fraudster, his employees, and his accountant. The evidence that investigators revealed showed that the fraudster intentionally misrepresented the number of employees on his payroll in order to obtain a lower insurance premium from the State Compensation Insurance Fund.

Business owners beware, workers' compensation may feel like an unnecessary expense, but if an employee is injured while there is not coverage in place, the resulting medical payments may be detrimental to a business. In California, as in most other states, all employers must have workers' compensation insurance for their employees so there is adequate medical coverage and benefits to any employee for work-related injuries that may occur.