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Mother and Son from San Ramon, CA, Convicted in $2 Million Workers’ Comp Insurance and Tax Fraud Scheme

sterling-davis-4iXagiKXn3Y-unsplash-300x180A mother and son who owned and operated two construction businesses in San Ramon, CA, have pleaded guilty to charges stemming from their alleged refusal to pay for workers’ compensation coverage and payroll taxes.

Selina Singh, 57, pleaded guilty to conspiracy to commit insurance fraud, payroll tax fraud, and insurance premium fraud. Her son, 30-year-old Kabir Singh, pleaded guilty to conspiracy to commit insurance premium fraud and insurance premium fraud. They both also admitted to an aggravated white-collar crime enhancement for a loss exceeding $500,000 through a pattern of alleged criminal activity.

According to the Contra Costa County District Attorney’s Office, the mother was the owner of Federal Solutions Group (FSG) and Bara Infoware Inc. Her son was an employee of the family businesses. The Singhs were charged in November 2018 after a worker who was injured on the job reported them to investigators, claiming they told him to lie about where the injury occurred. The worker was reportedly injured at a job site for Bara Infoware, but she allegedly wanted him to report that it occurred while he was working at FSG.

Investigators claim to have interviewed another injured employee who told them that the son allegedly asked him not to report his injury to the company’s insurance provider and instead offered to pay his medical bills out of pocket.

Based on those allegations, the DA’s office launched an investigation into FSG and Bara Infoware and learned that the companies often bid for and won government contracts, including construction contracts that required compliance with workers’ compensation laws. The defendants’  family purportedly employed laborers, carpenters, painters, and other workers to complete construction work, but fraudulently misrepresented the company’s payroll expenses in order to lower their insurance premiums.

Investigators allegedly identified a third company, Eagle Solutions, which was used to move money between FSG and Bara Infoware. That money was eventually used to obtain workers’ compensation policies for non-construction payroll even though the two companies were running construction job sites. An audit concluded the defendants were able to evade over $2 million in insurance premiums over a period of seven years. This was in addition to over $200,000 of evaded payroll taxes owed to the State of California.

Workers’ compensation insurance covers an injured worker’s medical bills, temporary or permanent disability benefits, lost income, and sometimes death benefits for the next of kin of a worker killed while on the job. Having this type of insurance is mandatory in California and many other states. Businesses commit fraud when they attempt to avoid paying their premiums by misclassifying their employees or fabricating payroll to conceal the true amount they owe.

Workers’ compensation fraud is a very serious offense. Business owners suspected of committing this type of fraud should immediately consult an experienced attorney who can conduct an independent investigation and come up with a good defense to minimize the penalties or have the charges dropped.

South Florida Workers’ Comp Fraud Attorney

Are you a business owner 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’ compensation fraud defense attorneys.

Source: 9.7.20 California residents convicted of $2 million insurance and tax fraud scheme.pdf

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