An Ontario, California man was recently sentenced to three years’ probation and 120 days in jail for committing workers compensation insurance fraud and stealing wages from his workers, both felonies.
Miguel Contreras, 36, the former owner of Ontario-based National Drywall, Inc., was also ordered to pay his insurance carrier $262,535 in underpaid workers comp insurance premiums.
According to Deputy District Attorney Michael Chiriatti, who prosecuted the case, during the course of the prosecution, Contreras’ workers were repaid $160,000.88 in stolen prevailing wages.
The conviction stems from a 2011 project in which Contreras was awarded the contract to install drywall at Joe Baca Middle School in Colton.
Pair of Schemes Were Hatched
“Because this was a ‘Public Works’ project, Contreras was required to pay his employees the current prevailing wage,” Chiriatti said. “However, he employed two schemes to avoid doing so.”
One method required some of his workers to “kick back” a portion of their pay on a weekly basis in order to keep their jobs.
The other required some workers to alter their time cards to falsely indicate that their primary job duties included “stocking/scrapping,” which was paid at a much lower prevailing wage, when in fact they were framing and hanging drywall, which was paid at a much higher prevailing wage.
While this theft of wages was occurring, National Drywall submitted false payroll reports to its workers comp insurance carrier, ICW Group, which resulted in a fraudulent reduction of its insurance premium.
Contreras was originally arrested on Oct. 23, 2014.
A year later, on Oct. 23, 2015, Contreras entered pleas to workers comp insurance fraud, and theft of prevailing wages, and admitted his conduct was subject to California’s white collar crime enhancement.
Author Kori Shafer-Stack, Editor, Amaxx Risk Solutions, Inc. is an expert in post-injury response procedures and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. www.reduceyourworkerscomp.com. Contact: kstack@reduceyourworkerscomp.com.
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