Fraud Totaled More Than $3 Million
A 65-year-old Wildomar, California man was recently convicted of workers compensation fraud, tax fraud and perjury, with losses to the state and others totaling more than $3 million.
According to the Riverside County District Attorney’s Office, Steven Morales was accused of setting up business fronts to hide payroll and keep from paying workers comp premiums.
Set Up Business Fronts to Cheat System
Morales and his son Brian Morales, 44, of Wildomar, colluded to cheat more than 400 employees out of insurance premiums for unemployment insurance between 2005 and 2008, and failed to report workers’ injuries, underreported the number of employees or reported no employees at all under the various front companies, the DA’s office stated.
Meantime, Brian Morales pleaded guilty in the case in January 2010 and was sentenced in April 2010 to four years in state prison, the DA’s office reported. He was also ordered to pay $3.1 million in restitution.
Could Be Sentenced to 17 Years in Prison
Steven Morales could be sentenced in October to 17 years, four months in prison and also be ordered to repay the $3.1 million in losses, according to the DA’s office.
Among those who were impacted by these crimes, the State Compensation Insurance Fund ($1.7 million), the state Employment Development Department ($1 million), the Granite State Insurance Co. ($300,000) and the California Contractors Network ($170,000), according to the DA’s office.
Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: [email protected].
WORKERS COMP MANAGEMENT MANUAL: www.WCManual.com
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
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