CALIFORNIA Business Owner Cited for Workers Comp Fraud

A local business owner was sentenced for reported failure to make contributions to the unemployment insurance fund and failure to secure workers’ compensation insurance according to Monterey County’s district Attorney.

An investigation was initiated when the DA received information for a former employee injured on the job and was unable to collect workers’ comp benefits. Agents with the Employment Development Department (EDD), the Department of Industrial Relations (DIR), and the Department of Insurance (DOI) joined the investigation when it was discovered the defendant collected payroll taxes from employees but did not reporting or forward the funds to the appropriate state agency.

The man was placed on felony probation for three years and ordered to serve three months in county jail or complete an equivalent work alternative program. In addition to standard terms and conditions of probation, the man was ordered not to conduct business in violation of the law. He must also pay EDD $23,738.84 as restitution; a fine of $41,311.36 to the California Workers’ Compensation Fraud Account; and, a statutory fine of $10,000 to the District Attorney’s Office.

The court also ordered him to maintain and provide proof of workers’ comp insurance for all employees, provide a certificate of insurance to the California Department of Insurance, pay all employees only by check itemizing all appropriate payroll deductions, and to comply and maintain all licenses in any city or county in which he conducts business. (workersxzcompxzkit)

Additionally, the man is ordered to make payments as directed by the Workers’ Compensation Appeals Board for workers’ comp benefits due the injured employee. Further, the defendant is required to contact and make payment arrangements for any administrative fines levied by the DIR and the Division of Labor Standards Enforcement.

Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-786-8286.