California Man Hit With Major Fines For Workers’ Comp Fraud

December 14, 2019
Sacks & Zolonz, LLP
Workers’ Compensation Counseling

Business owners and operators have many things to keep up with over the course of a week, month, and year. It can be a struggle to understand and keep up with all of the laws and regulations businesses are required to follow. In California, nearly every employer must provide workers’ compensation insurance to their employees. Failing to do so can result in serious penalties. Today, the Los Angeles workers compensation defense attorneys at Sacks & Zolonz, LLP want to discuss the case of a California man who was recently fined nearly $1,000,000 for failing to comply with the law.

What happened in this case?

If you are a business owner, then you are likely aware that state regulatory agencies regularly crack down on anyone suspected of trying to avoid paying workers’ compensation insurance. We have recently learned that Michael Zendejas, 47, was sentenced to three years of formal probation, 180 hours of community service, and ordered to pay $944,718 in restitution after he pleaded no contest to insurance fraud.

Zendejas is the owner and president of Trinity Personnel Inc., an employment agency that provides temporary workers for other companies. He had obtained a workers’ compensation policy through the State Compensation Insurance Fund from September 2014 through December 2016.

State agencies performed an audit of his insurance policy and discovered that Zendejas under-reported his company’s payroll by $4.9 million. They allege that he did so in order to receive a lower premium on his workers’ compensation insurance premium.

The investigation was conducted by the California Department of Insurance and the Amador County Workers’ Compensation Fraud Unit.

You must stay in compliance with state laws

Just about every employer in the state of California must have workers’ compensation insurance for their employees. Not having this insurance can result in the business owner being charged with a misdemeanor offense that is punishable by up to one year in jail and a fine of $10,000.

As you can see from the story above, taking steps to lower workers’ compensation premiums by deceptive methods can result and even harsher penalties such as restitution. While Mr. Zendejas avoided jail time, he will still face tremendous oversight well serving three years of probation. Any further violations will very likely result in him being sent to jail.

Business owners must take steps to thoroughly understand their legal obligations when it comes to workers’ compensation insurance and income reporting.

We will help you get through this

If you own a business in California and are facing charges of workers’ compensation fraud, you need to seek legal assistance immediately. The state of California takes these instances seriously, and you could face severe penalties, including jail time, major funds, community service, losing your business, and more. The qualified and experienced team at Sacks & Zolonz, LLP will get to work investigating what happened. Our goal is to get the charges against you reduced or dropped altogether. When you need a Los Angeles workers’ compensation defense attorney, you can contact us for a consultation of your case by clicking here or calling 310-216-7778.

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