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California Siblings Arrested for Workers’ Compensation Fraud

police-2122373_1920-300x200A brother and sister in Paramount, California have been charged with workers’ compensation fraud and grand theft of labor. The siblings, who run Ultimate Inc. construction company, are accused of defrauding the State Compensation Insurance Fund of $6 million.

Enrique Vera, 48, is the owner of Ultimate Inc., while his sister, Gloria Vera, 57, is the company’s office manager. Christopher Hartman of the Los Angeles County District Attorney’s Office alleges they falsified payroll records of Ultimate Inc. in order to pay a lower rate of workers’ compensation insurance.

The siblings are also accused of making fraudulent statements to employees injured at work, with the intention of stopping them pursuing any workers’ compensation claims or taking advantage of related benefits. Additionally, Gloria Vera allegedly concealed workplace injuries that would have entitled the affected employees to workers’ compensation payouts.

The Veras are accused of breaking the terms of their contract with UCLA when they were working on a student accommodation renovation project. Ultimate Inc. paid workers less than the prevailing wage as they were contractually required to do.

Gloria Vera faces three counts of felony grand theft of labor, three counts of felony insurance fraud, and five counts of felony workers’ compensation fraud. If convicted, she faces a maximum sentence of 19 years in state prison. Enrique Vera is charged with three felony counts of grand theft of labor and four of workers’ compensation fraud. He faces up to 15 years in state prison if convicted.

Ultimate Inc. is the latest company to be found to have underpaid workers’ compensation insurance premiums. In California, businesses are required to have workers’ compensation coverage for their workers even if they only have one employee. At $2.87 per $100 of payroll, California is ranked second in the nation for most expensive workers’ compensation insurance.

Premiums, however, vary greatly depending on the industry. In California, the base premium for a roofer—one of the highest-risk construction jobs—ranges from a low of $24.34 to a high of $80.81. For comparison, the average hourly pay for a roofer is $23. Employers usually pay the highest rates either if their business is new, or if they have already had several workers’ compensation claims made against them.

In addition to these overheads, employers face other payroll obligations at the state and federal levels. Companies have resorted to misclassifying employees or misrepresenting their payroll to reduce workers’ compensation insurance costs.

To avoid high premiums, contractors often employ workers through employee leasing businesses. This benefits the contractor because, as they transfer their employees to the leasing business’s payroll, they are able to take advantage of the leasing company’s track record. This usually results in lower workers’ compensation insurance premiums.

An arrest warrant for the siblings was issued on October 24. The arraignment for Enrique Vera was set for November 2 at the Clara Shortridge Foltz Criminal Justice Center in downtown Los Angeles. Gloria Vera will appear in court at a later date.

The prosecutor has requested bail be set at $430,000 for Enrique Vera and $505,000 for Gloria Vera.

Florida Workers’ Compensation Fraud Defense Attorney

If you are involved in a worker’s compensation fraud investigation, then you should hire a lawyer. Contact us to set up a free initial consultation and work with one of Florida’s most experienced workers’ compensation fraud defense attorneys.

Source

2018-11-01 CA Construction Company Operators Charged with Fraud, Labor Theft