On the heels of an alleged $36 million workers compensation fraud scheme being prosecuted in Orange County, Calif., another string of California businesses is accused of defrauding comp insurers in the state.
Several California contracting firm employees were arraigned this week in connection with various insurance fraud schemes that included workers comp fraud, unemployment fraud and tax evasion, the San Diego County District Attorney's office said Tuesday.
Defendants in the cases involve the owners of Encinitas, Calif.-based A1 Patio and Remodeling Experts, Escondido, Calif.-based Christina Engineering, National City, Calif.-based Quality Way Building Maintenance and Escondido-based Rufino's Landscaping. The contractors allegedly bilked $1.5 million from insurers and the California tax board.
A total of 14 defendants have been indicted in the scheme since December, and 10 of them were arraigned Tuesday, the DA said. The remaining four were arraigned on Jan. 6.
Among the cases:
- Rufino Aguiluz and his wife, Maria Foulk of Rufino's Landscaping allegedly underreported payroll to several workers comp insurers and tax collectors, causing losses of $952,202, the DA's office said.
- Russ E. Kubart of A1 Patio and Remodeling Experts allegedly instructed an employee who was injured at work to claim that he hurt himself at home since Mr. Kubart did not carry workers comp insurance. The worker's claim was worth $160,000, according to the DA's office.
- Marcos Castaneda of Quality Way Building Maintenance faces four counts of felony insurance fraud after he also allegedly underreported payrolls to comp insurers. The DA's office said Mr. Castaneda's alleged fraud cost insurers $133,921.
Last year, the California Department of Insurance "received more than 5,000 referrals for suspected workers' compensation fraud, with losses totaling more than $340 million," said state Insurance Commissioner Dave Jones in a statement. "The impact of fraud is felt across California businesses and is a drain on our economy."