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10 Years for Orange Co. Contractor Convicted of Work Comp Fraud

In a very interesting workers' compensation defense story, a Laguna Hills man has been sentenced by an Orange County judge to 10 years in prison for orchestrating what prosecutors called one of the largest work comp fraud schemes in California history.

Prosecutors alleged that Michael Vincent Petronella, 51, (along with his wife Devon Lynn Kile, 44, who is facing separate charges) owned three roofing/general contracting businesses, and engaged in a complex pattern of fraudulent practices regarding work comp premiums and work comp claims.

Specifically, prosecutors claimed that Petronella:

  • Submitted 42 fraudulent workers' compensation claims, resulting in a $253,000 loss for the state of California
  • Reported $3 million in payroll to the State Compensation Insurance Fund while his actual payroll was closer to $32 million, an action that resulted in million dollar losses for the state of California
  • Provided state agencies with false employee/payroll records for auditing purposes

Petronella was convicted last February of 33 felony counts of insurance fraud.

Law enforcement officials became suspicious of Petronella's activities following a March 2006 accident involving one of his employees. The injured employee stated that his employer was Western Cleanoff Inc., a Petronella-owned company. However, the company was neither registered nor insured by the State Compensation Insurance Fund.

Petronella and Kile were eventually arrested in April 2009 following a lengthy investigation. After executing a search warrant, law enforcement officials discovered $51,000 in cash and over $500,000 worth of jewelry. The couple also owned several expensive automobiles, as well as five properties in both California and Texas.

The judge gave Petronella credit for 833 days served, meaning he could be eligible for release after 2 and a half years in prison. In addition to the incarceration, he was ordered to pay multiple fines, including $500,000 in restitution and another $500,000 fine.

A pretrial hearing for Devon Lynn Kile is scheduled for later this week. However, prosecutors have already indicated they will probably seek a plea deal due to her limited involvement in the alleged work comp fraud scheme.

Stay tuned for further developments from our workers' compensation defense blog ...

This post was provided for informational purposes only and is not to be construed as legal advice.

Related Resources:

Contractor Gets 10 Years in Workman's Comp Fraud (Los Angeles Wave)

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