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Riverside County DA charges pool company owner with multiple counts of work comp fraud

Uninsured employers, meaning those who fail to carry the necessary amount of workers' compensation coverage in the state of California, face a multitude of penalties from steep fines and the loss of a professional license to possible incarceration.

To illustrate, a Southern California pool contractor is now facing a rather lengthy prison sentence after law enforcement officials charged him with multiple counts of insurance fraud and tax evasion back on January 21.

According to the Riverside County District Attorney's Office, Michael S. -- the owner and general manager of United States Pools Corp. located in Palm Desert -- allegedly engaged in a systematic pattern of fraudulent activity from 2007 to 2012.

Specifically, prosecutors allege that he sought to reduce his work comp premiums by falsely reporting his pool cleaning employees as independent contractors and failing to report his pool construction employees on his work comp policy. These practices, they say, resulted in the illegal withholding of roughly $566,950.

This rather sizeable sum of money would have otherwise been paid to the California State Compensation Insurance Fund, the State Board of Equalization and two insurance companies.

Michael S. has since pleaded not guilty to the charges against him, which include falsifying statements to reduce work comp rates and failing to collect taxes. He faces up to 16 years in state prison if convicted.

The actions of the Riverside County District Attorney's Office have been applauded by several groups within the construction contractor industry. These groups argue that actions like Michael S.' are harmful to otherwise legitimate operators.

"This is a great step in the right direction by the district attorney's office and other state agencies to coordinate efforts," said Mike Geremia, chairman of the California Spa and Pool Education Council. "We expect this is just the tip of the iceberg and hope the district attorney and state enforcement agencies will continue cracking down on corrupt contractors who compete unfairly."

If you are an uninsured California employer facing a real problem -- prospective fine, prosecution, an employee injury or litigation -- there may be steps that can be taken to minimize the consequences. In these difficult circumstances, you may want to consider consulting with an experienced legal professional.

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

Stay tuned for further developments in the area of workers' compensation defense law ...

Source:

Insurance Journal, "California contractors praise charges against pool company," Feb. 5, 2013

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