According to a report from the Insurance Journal, two California truck company owners, Hardip Singh and Amandeep Kaur, have been charged as part of a workers’ compensation insurance fraud scheme. The business partners owned and operated a Sacramento-based trucking company called Trust Transport, Inc.
They are alleged to have systematically underreported payroll. By doing so, authorities contend that they bilked their insurance carrier out of $234,000.00 (and the State of California out of an additional $220,000.00) in underpaid workers’ compensation premiums. In this article, our California workers’ compensation defense lawyers discuss the charges filed against the two company owners.
Allegations: Trucking Company Only Reported Less Than 10% of Payroll Costs
With a principal business location in Sacramento, Trust Transport, Inc. operates out of a trucking yard in West Sacramento. State authorities determined that their business reported a little more than $105,000.00 in total payroll expenses during the relevant, multi-year review period. Regulators believe that this amount represented less than 10% of the true value of the company’s payroll costs. As workers’ compensation insurance rates are determined, in large part, on a company’s total payroll, the trucking company allegedly dramatically underpaid premiums.
Employees Were Improperly Classified as Independent Contractors (Paid Under the Table)
Investigators believe that the owners of the trucking company intentionally misclassified its employees as independent contractors in order to avoid paying workers’ compensation premiums to its insurance company and the Employment Development Department. In other words, its employees were paid ‘under-the-table’ using 1099 forms.
Evidence was discovered in a comprehensive audit of the business. Eventually, a search warrant was obtained by the California Department of Insurance (CDI). The inquiry revealed more than $1.3 million in underreported payroll costs. The CDI is the state agency responsible for a number of different regulatory matters, including the investigation and prosecution of insurance fraud allegations.
California Cracking Down on Employers that Violate Workers’ Compensation Laws
In recent years, our state regulators have become more aggressive in pursuing workers’ compensation violations by employers. As California Insurance Commissioner Ricardo Lara told reporters, companies that intentionally underreport payroll are “breaking the law” and the agency will continue to forcefully “investigate cases like this” to ensure accountability.
All employers should have proper workers’ compensation coverage. Notably, there are serious financial and legal risks associated with being an uninsured employer in California. Companies and organizations that fail to obtain the proper workers’ compensation coverage could face harsh sanctions, potentially including a civil lawsuit, monetary fines, and even criminal charges.
Get Guidance from a Central California Workers’ Compensation Defense Attorney
At Yrulegui & Roberts, we have successfully represented clients for more than 40 years. With a focus on practical and results-driven legal guidance, our workers’ compensation defense attorneys will protect your rights and interests. Contact our firm to find out more about our legal services. We are well-positioned to serve the following WCAB locations: Fresno, Bakersfield, San Luis Obispo, Santa Barbara, Oxnard, Van Nuys. Sacramento, Stockton, and Redding.