According to a report from the Sacramento Bee, a court has decided to drop workers’ compensation fraud charges against three individuals who were collectively accused of defrauding the system out of more than $125,000.00 in workers’ compensation premiums. A last-minute piece of key evidence regarding intent changed the situation. The criminal workers’ compensation fraud trial was already entering its fourth week. Within this article, our Sacramento workers’ compensation defense attorney provides a more in-depth overview of the workers’ compensation fraud case.

Background: An Alleged Workers’ Compensation Fraud Scheme in El Dorado County

El Dorado County is located just east of Sacramento. Earlier this year, workers’ compensation fraud charges were filed in the county against three individuals: Troy Williams, John Allison, and Nanci Morman. They allegedly bilked the state’s workers’ compensation system out of more than $125,000.00. California regulators and prosecutors in El Dorado County argued that they knowingly committed workers’ compensation fraud.

Authorities contend that the workers’ compensation fraud scheme occurred over the period of four years, from 2016 to 2020. During that time, workers were transferred from one construction company (Archer Building Co.) to another construction company (Allison Development). Notably, the first company (Archer) had high workers’ compensation rates due to recent accidents. Prosecutors allege that the “restructuring” was simply a workers’ compensation fraud scheme.

Workers’ Compensation Fraud Charges Dismissed: Defendants Relied On Outside Professionals

The criminal workers’ compensation fraud trial has been going on for a period of several weeks in El Dorado County. The last-minute dismissal of the charges comes after key evidence was introduced by the defense. The defendants produced compelling evidence that they were relying on the professional advice of an insurance agency based in Roseville, California. In response to the new evidence, the El Dorado County Deputy District Attorney told the court that the office no longer believes it can prove the charges. Soon after, the judge dismissed the case outright.

Similar to other criminal charges, a criminal workers’ compensation fraud charge requires intent. A person in California will not face criminal workers’ compensation fraud liability for a good-faith mistake. They could still face fines or other civil penalties for a good-faith mistake, but it is not a criminal violation. In this case, the fact that the defendants were relying on the professional guidance of a licensed insurance agency strongly suggests a lack of criminal intent. The prosecution agreed, and it dropped all of the criminal charges even though the trial was well underway. 

Speak to a Workers’ Compensation Defense Lawyer in Sacramento, California

At Yrulegui & Roberts, our Sacramento workers’ compensation defense law firm is devoted to protecting the rights and interests of clients. If you have any questions about workers’ compensation fraud allegations, we can help. Contact our law firm today to set up your completely confidential appointment with an attorney. From our Sacramento office, we provide workers’ compensation defense services, including in Sacramento County, San Joaquin County, Sutter County, and Solano County.