According to a report from Insurance Journal, two California business owners—a married couple named Wei Wen Wu, and Feng Wen Lam—are facing dozens of counts of workers’ compensation fraud. Authorities allege that the business owner couple defrauded private insurance companies and the California state fund out of nearly $1.7 million by underreporting payroll for more than five years. Here, our Fresno workers’ compensation defense attorneys discuss the allegations in this case.
Allegations: Underreported Payroll Results in Dramatically Lower Insurance Premiums
Wei Wen Wu, and Feng Wen Lam owned and operated a company called Golden Food Inc., —a poultry processing company located in South El Monte, California. From 2015 through 2021, prosecutors allege that Golden Food Inc. underreported its payroll by more than $4 million per year. As a direct consequence, the employer paid dramatically lower insurance premiums that were actually due. Private insurers and the California State Compensation Insurance Fund were affected. In total, the business owners paid nearly $1.7 million less in premiums than was owed.
The investigation into the company was initiated after employees at the State Compensation Insurance Fund conducted an initial audit into the firm’s payroll records. A search warrant was obtained by Los Angeles County authorities. Through a review of the internal records held by Golden Food Inc., prosecutors contend that the true payroll information was uncovered. It should clear underreporting for workers and worker salaries.
Underreporting Payroll is One of the Most Common Workers’ Compensation Fraud Schemes
California authorities are continuing to crackdown on all forms of workers’ compensation fraud. Notably, one of the most common sources of workers’ compensation fraud is the intentional underreporting of payroll. In California, all employers are required to obtain and maintain no-fault workers’ compensation insurance for their employees. One of the primary factors that determines workers’ compensation insurance premiums is a company’s payroll costs. When employers fail to report payroll accurately in order to get reduced premiums, they are defrauding the system.
Los Angeles County Business Owners are Facing Serious Felony Criminal Charges
Workers’ compensation fraud is a serious criminal offense in California. Depending on the circumstances, a perpetrator could face a wide array of different criminal charges, including felony offenses. In this case, the pair of Los Angeles County business owners are facing nearly four dozen counts of felony charges. More specifically, the couple has been charged with the following:
- Insurance fraud;
- Grand theft; and
- Criminal conspiracy.
Schedule a Confidential Consultation With a California Workers’ Compensation Lawyer
At Yrulegui & Roberts, our California workers’ compensation defense lawyers have the professional skills and legal knowledge to handle the full range of fraud claims. If you have questions about workers’ compensation fraud, we are available to help. Give us a call now or get in touch with us online for your strictly private case review. Our workers’ compensation defense law firm serves communities throughout Central California, including in Fresno, Bakersfield, Redding, Sacramento, Oxnard, and Van Nuys.