Two owners of a long-haul trucking company based in Sacramento, CA, have been charged for allegedly misclassifying employees and underreporting payroll in a scheme to defraud their insurer and the Employment Development Department out of $450,000 in insurance premiums.
Hardip Singh, 44, and Amandeep Kaur, 36, were charged with multiple counts of insurance fraud. It is unclear if they have acquired legal representation.
According to the California Department of Insurance, Singh and Kaur are the owners of Trust Transport, Inc., a Sacramento-based long-haul trucking company. They allegedly underreported the company’s payroll over a period of two years in order to avoid paying higher insurance premiums.
“By underreporting payroll and employees, not only are business owners breaking the law; they are putting honest businesses at risk,” said Insurance Commissioner Ricardo Lara. “We investigate cases like this to protect legitimate businesses and California consumers who pay the price for this type of fraud through higher insurance premiums and increased costs.”
From February 2014 through October 2016, Trust Transport allegedly maintained workers’ compensation insurance coverage with State Compensation Insurance Fund (SCIF) and reported $105, 811 in payroll. SCIF conducted audits to confirm the company’s payroll and found that several workers had been misclassified as independent contractors rather than employees, which changes the way they are paid. Investigators served a search warrant at the company’s bank for financial records and discovered that roughly $1,436,387 in payroll for the misclassified workers was unreported by Singh and Kaur.
The investigation revealed that the pair fraudulently misclassified the workers in order to avoid paying hundred of thousands of dollars in workers’ comp premiums, the press release said. The alleged scheme resulted in a loss of $234,541 for SCIF and $220,000 loss for the Employment Development Department.
“This type of fraud often creates a disadvantage for honest business owners who provide proper reporting and payments to SCIF and EDD,” said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona. “The state must hold business owners who cheat accountable.”
Carrying workers’ compensation insurance is mandatory for employers in many states, including California. It is meant to help both employers and their employees in the event of a workplace injury, illness, or death. Workers’ comp insurance covers an injured employee’s lost wages and medical expenses as well as rehabilitation in some cases, or death benefits for the employee’s family if they died while on the job. With some very few exceptions, all businesses are required to operate with workers’ comp insurance.
Making false statements and underreporting payroll in order to pay lower premiums can lead to criminal prosecution. It is essential for business owners charged with workers’ compensation fraud to immediately consult an attorney who can build a strong defense and help them avoid the potential penalties of a conviction.
South Florida Workers’ Comp Fraud Attorney
Is your business accused of workers’ comp 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.