A California roofing company owner faces insurance fraud charges after she allegedly underreported payroll for her business by over $4 million, resulting in losses of more than $2 million to the California State Compensation Insurance Fund.
Judy Hein, 71, of Oxnard, CA, was arraigned on five felony counts of insurance fraud. It is unclear if she has acquired legal representation.
According to a news release, the accused is the owner of Cal Roofing, Inc. in Simi Valley. The California Department of Insurance reportedly received a referral form from the State Compensation Insurance Fund claiming Cal Roofing was underreporting payroll in order to lower her workers’ compensation insurance premiums.
An investigation allegedly revealed the number of roofing projects and business revenue the company received was not in line with the company’s stated number of employees or estimated annual premiums. Investigators compared wage information from the Employment Development Department (EDD) for Cal Roofing to the information in corresponding state insurance fund policy audits and discovered large discrepancies, sources indicate.
The roofing company owner was allegedly responsible for filing the fraudulent payroll reports with the state insurance fund. She also signed EDD documents that revealed the alleged underreported payroll, the indictment claims. The audit findings and payroll reports she purportedly filed with the state insurance fund show a payroll of almost $832,000 from 2013 through 2018, while the payroll reports she filed with EDD and bank records show a payroll of almost $5 million. She is further accused of deliberately misrepresenting the information in order to obtain workers’ compensation insurance at a reduced rate. The suspected fraud resulted in an estimated loss of $2.1 million to the State Compensation Insurance Fund.
“Illegally underreporting payroll to your insurance company to save on business expenses is a crime,” said Insurance Commissioner Ricardo Lara. “The fraudulent actions of this business owner led to artificially inflated costs to insurance companies, businesses and consumers. Insurance fraud is not a victimless crime. We all pay a cost for these illegal actions.”
The accused was arraigned on November 17, 2020. The case is being prosecuted by the Ventura County District Attorney’s Office.
Workers’ compensation insurance is designed to provide workers injured on the job with medical benefits and wage replacement while they recover. In exchange for those benefits, the worker forfeits the right to sue their employer for negligence in a “no fault” system. Most states, including California, require employers to carry workers’ compensation insurance.
Employers in almost every industry are required by law to carry this type of insurance. Misrepresenting either how many workers you have or what kind of work those workers do in order to reduce your workers’ compensation premiums is considered fraud.
In many cases, insurance fraud is prosecuted as a felony with severe penalties that come with convictions. That’s why an employer suspected of committing fraud involving workers’ compensation system should immediately consult an experienced fraud defense attorney.
South Florida Workers’ Comp Fraud Attorney
Are you accused of committing workers’ compensation fraud in South Florida? Contact Brian Silber, P.A. to set up a free initial consultation with one of South Florida’s most experienced workers’ comp fraud attorneys.