According to reporting from Insurance Journal, a group of California contractors have been criminally charged as part of an investigation into a suspected $5 million workers’ compensation fraud scheme. State regulators allege that the workers’ compensation fraud in this case was both intentional and well-organized. In this article, our Fresno workers’ compensation defense attorneys discuss the criminal workers’ compensation fraud charges filed against the contractors.
Multiple, Felony Workers’ Compensation Fraud Charges
The workers’ compensation fraud charges are being pursued jointly by the California Department of Insurance and the District Attorney’s Office for Alameda County. Workers’ compensation fraud charges have been filed against the following parties:
- Signature Painting and Construction Inc, which is based in Walnut Creek, California;
- Eric Andrew Oller and Brian Christopher Mitchell (the former owners of Signature);
- A-1 World Class Painting, which is based in Concord, California; and
- Yama Sekander (the owner of A-1 World Class);
- Valhalla Consulting, a Walnut Creek company owned by Mr. Oller.
Prosecutors have filed multiple felony charges in relation to this $5 million workers’ compensation fraud case. Mr. Oller and Mr. Mitchell are each facing felony charges for conspiracy to commit a crime, insurance fraud, and workers’ compensation fraud. Mr. Sekander has also been charged with one count of felony workers’ compensation fraud.
Allegations: Misrepresentation of Payroll Costs to Defraud Workers’ Compensation Insurers
In California, virtually all employers are required to obtain workers’ compensation insurance coverage for their employees. Failure to do so is a serious violation. Companies must properly report their payroll expenses to insurance providers when obtaining workers’ compensation coverage. In this case, California prosecutors/regulators allege that the contractors intentionally misrepresented their payroll expenses in order to defraud workers’ compensation insurance companies. More specifically, the following allegations have been raised against the three business owners from Alameda County:
- Signature Painting and Construction paid employees through a shell company in order to conceal its true payroll costs;
- Signature Painting and Construction unlawfully misclassified some employees as independent contractors to reduce its workers’ compensation insurance requirements; and
- Signature Painting improperly used A-1 World Class Painting to go around the workers’ compensation system and obtain coverage for some employees.
The total cost of the alleged workers’ compensation fraud is significant. The California Insurance Department reports that the misconduct of the parties resulted in a more than $3 million loss for the State Compensation Insurance Fund. Additionally, the insurance company AmTrust allegedly sustained nearly $2 million in losses due to this workers’ compensation fraud scheme.
Call Our Central California Workers’ Compensation Defense Attorneys for Immediate Legal Help
At Yrulegui & Roberts, our top-rated Fresno workers’ compensation lawyers possess the professional skills and legal knowledge to protect your rights. If you have questions about defending your interests against workers’ compensation fraud, we are here to help. Contact our firm now for your strictly confidential case evaluation. With law offices located in Fresno, Bakersfield, Madera, and Sacramento, we provide workers’ compensation defense representation throughout the entire region.