$400K Workers’ Comp Scheme in California

William J. Kropach

Father and son were recently detained and pleaded guilty in California due to a workers’ comp insurance fraud of $400K. They were sentenced to 250 days in jail, 10 years of felony probation and must pay $382,951 in restitution. According to the investigation, Jaime Rosario Del Real and his son Israel Del Real were concealing injuries their workers had suffered during the course of their employment. They also failed to provide required benefits, including paying for their employees’ medical treatment. Del Reals lied multiple times in order to offer these workers fewer benefits.

Del Reals were farm labor contractors providing workingmen for lettuce farms in California and Arizona. California detectives found evidence the contractors were concealing injuries their employees had sustained and failed to provide them with medical coverage and other important benefits. Apparently, they had lied about 20 times to lower insurance premiums. In order to keep stealing, Del Reals had two different employment forms with a different amount of employees, which helped them evade payroll taxes.

Business owners are responsible for their employees

All employers in California are required to provide workers’ compensation coverage, even those with just one employee. Executive and directors should be included in this coverage unless they own the business or corporation and if don’t want this coverage. Coverage can be purchased from a state or commercial provider.

Warning signs of workers’ comp fraud

Workers’ comp insurance fraud is illegal and a serious offense. It can affect both producers and carriers and burden other businesses with higher insurance premiums. Independent insurance agents can detect this type of fraud as they are the link between policyholders and insurance carriers. Among the most common warning signs of premium fraud you will find:

  • Underreporting payroll – This occurs when the policyholder doesn’t report all employees to the insurance company. In these types of cases, employees are generally paid as independent contractors or sub-contractors.
  • Misclassifying employees – This is when the title or position that the employee holds at the company is misclassified in order to pay fewer premiums.
  • Experience modification evasion – This is when a company closes and starts afresh with a new name but the new company is just like the old one.

Reporting workers’ comp fraud

Workers’ comp is a serious charge, therefore, you should hire an experienced workers comp defense attorney in Encino to handle your case. If you suspect your employer is committing premium fraud, it is important you consult your attorney before reporting the fraud as there are some risks involved. Remember you are protected by both federal and state law.

Contact us today and schedule your initial case assessment with one of our talented attorneys. We can help you gather convincing evidence to prove the individual or organization has committed fraud. Unfortunately, some people gather evidence in a way that’s against the law. We can obtain evidence lawfully and ensure your rights are fully protected.

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