The former owner of a California company that installs drywall was recently sentenced to 120 days behind bars followed by probation for three years. The sentence followed a conviction on payroll and workers compensation fraud. He will also have to pay the defrauded insurance company more than $262,000 for underpaid premiums. Furthermore, over $160,000 of stolen wages were repaid to workers during the prosecution of the case.
Court documents showed that the case related to a 2011 project for the installation of drywall at a school. Workers had to be paid current prevailing wage levels; however, in order to keep their jobs, some employees had to pay back a portion of their weekly wages to the company’s owner. Other workers’ time cards indicated job duties for which the required pay were significantly lower than the prevailing wage for hanging drywall.
Court documents also stated that the company then submitted fraudulent payroll reports to the workers’ compensation insurance company. The fraudulent submissions resulted in lowered insurance premiums. The businessman was arrested in October 2014 and entered pleas to both charges when he admitted to fraudulent actions.
To avoid similar situations, California business owners may utilize the services of an experienced workers’ compensation defense attorney. When employers are accused of workers’ compensation fraud or payroll fraud — including underreporting or failure to report accurate payroll figures, serious fraud allegations can follow. An attorney with experience in this field can assess the evidence and work on a defense strategy to limit the repercussions that may follow if a conviction is obtained.
Source: workerscompensation.com, “Ontario Man Convicted of Workers’ Compensation Fraud in CA“, Dec. 15, 2015
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