Workers’ compensation fraud remains a serious problem in our state. Three business owners were recently indicted and arraigned on criminal workers’ compensation fraud charges. As reported by Insurance Journal, the following three individuals are facing criminal workers’ compensation fraud allegations:
- Troy Williams of Angels Camp, California;
- Nanci Morman, of Somerset, California; and
- John Allison, of Rocklin, California.
Authorities contend that they engaged in a collective conspiracy to defraud the workers’ compensation system. Here, our Salinas workers’ compensation defense lawyer discusses the workers’ compensation fraud charges filed against the three business owners in California.
Allegations: Employer Payroll Was Systematically, Intentionally Underreported
Workers’ compensation insurance rates depend, in large part, on the payroll of a company or organization. In California, an employer’s workers’ compensation rate will be calculated using several factors, including their total payroll costs and the class of work that employees are engaged in.
Multiple felony charges were filed against the defendants after a comprehensive investigation reportedly revealed that they were engaged in a systematic conspiracy to defraud the workers’ compensation system by hiding and underreporting payroll. The investigation was led by local prosecutors in El Dorado County and state officials from the California Department of Insurance.
Allegations: A Shadow Company Was Created to Illegally Reduce Workers’ Compensation Costs
The first named defendant, Troy Williams of Calaveras County, owned and operated a contracting business called Archer Building Co. The company’s main headquarters was listed as El Dorado Hills, California. Insurance regulators and prosecutors contend that between 2016 and 2020, the company’s payroll was systematically underreported to avoid paying the full workers’ compensation insurance rate.
In 2016, another defendant, John Allison, created a business called Allison Development. Mr. Allison was previously an employee of Archer Building Co. The parties allegedly conspired to use Allison Development as a shadow company to limit the workers’ compensation premiums of Archer Building Co.
Prosecutors contend that the third individual, Nanci Morman, was the bookkeeper for both Archer Building Co. and Allison Development. Authorities believe that she played an instrumental role in carrying out the workers’ compensation fraud scheme.
Workers’ Compensation Fraud Costs All Parties—Insurers, Other Employers, and Employees
In this case, prosecutors contend that the three individuals bilked the state’s workers’ compensation insurance system out of more than $127,000.00 in premiums that should have been paid. The reality is that workers’ compensation fraud remains a pervasive problem in California. It may be committed by employers—such as through the intentional underreporting of payroll. It could also be committed by an employee—such as one who knowingly conspires with a doctor to make a false claim for benefits.
Consult With Our Salinas Workers’ Compensation Defense Attorney Today
At Yrulegui & Roberts, our California workers’ compensation defense lawyer has the professionalism, skills, tenacity, and real-world experience to protect your rights and interests against workers’ compensation fraud. Call us now or connect with us online to arrange your confidential appointment with a lawyer. We represent clients in Salinas, Monterey County, and throughout the wider surrounding area.