“The president of a former Trenton construction company pleaded guilty today to stealing more than $450,000 by cheating its workers compensation carrier, failing to file tax returns and underreporting wages for his business and himself.

Under the plea agreement, the state will recommend Garcia-Merlos be sentenced to eight years in state prison. The state is also seeking $451,142 in restitution, the office said.

“By providing misinformation to his workers’ compensation carrier, he not only failed in this responsibility but also defrauded an insurance company out of hundreds of thousands of dollars,” Acting Insurance Fraud Prosecutor Ronald Chillemi said in a statement.”

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“California contractors were sickened by the news in the recent California Department of Insurance (CDI) announcement on the arrest of the unscrupulous owners of A & F Engineering who allegedly committed insurance fraud and denied insurance benefits to an employee’s family. As announced by Commissioner Dave Jones, A & F Engineering’s employee, Jose Villanueva, was killed in a work-related accident. As a consequence of owners Allan and Carolina Pacheco’s failure to pay less than $12,000 in workers’ compensation insurance premiums, Villanueva’s wife and three children will receive no death benefits, which would have been “approximately $650,000 plus burial benefits.” If convicted of the charges, the owners face time in state prison and as much as $710,000 in fines and reparation.

“We appreciate CDI’s efforts in catching swindlers like these business owners. It is truly unfortunate that a family has to suffer this way and be denied what is rightfully theirs,” said Northern California Electrical Construction Industry Labor Management Cooperative Trust Executive Director Andre Gardner. “Too often, legitimate trade contractors lose work to corrupt contractors who underbid jobs and cheat their workers, making it difficult to compete on a fair and level playing field.”

Conduct due diligence and verify insurance coverage of all of your business partners. Be Sure.

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“An April 23 press release issued by Insurance Commissioner Dave Jones announced the owners of Hallmark Roofing of Belmont, were arrested on 29 felony accounts for workers’ compensation and unemployment insurance fraud, including failure to report employee wages. After investigations and a forensic audit by the California Department of Insurance, owners John and Camille Applegate were found to have inaccurately reported their employees’ wages, thereby failing to pay nearly $630,000 in workers’ compensation insurance premiums over a five-year period. The Applegates’ also neglected to report employees’ wages and pay taxes on those wages to the Employment Development Department (EDD) between January 1, 2010, and January 1, 2012, even though they deducted the wages from their employees. If convicted, John and Camille Applegate each could face up to five years in state prison and payments in excess of $1 million.

“The pursuit and arrest of Hallmark Roofing’s owners reinforces the goal of ethical contractors to eliminate the underground economy and level the playing field.”

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“The San Bernardino County district attorney’s office on Tuesday began laying out its case against a Rancho Cucamonga disaster-restoration company charged in a multimillion dollar forgery and insurance fraud case.

Investigators allege the three defendants were involved in a scheme in which they cashed insurance company checks by forging homeowner signatures and fraudulently endorsing mortgage companies banking information on the back of the checks.

Manchester and Roberts were the owners of two ServiceMaster franchises, including the one in Rancho Cucamonga. Reavis was the controller.

ServiceMaster specializes in restoration, cleanup and construction after a fire or flood.

Since their arrests last year, the San Bernardino County district attorney’s office filed an additional six charges of worker’s compensation fraud.

David Simon, the lead prosecutor in the workers’ compensation fraud unit, countered saying that by providing false information to the workers’ compensation insurance carrier, the company saved hundreds of thousands of dollars annually in insurance costs — savings that gave them an advantage when bidding on jobs.

“Because of those savings, they can underbid honest businesses on jobs,” Simon said. “Honest businesses have to be protected against these unfair business practices.”

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“The president of a Panhandle construction company was arrested for falsifying payroll information to avoid workers’ compensation premiums, following an investigation by the state Department of Financial Services’ Division of Insurance Fraud.

Seltzer, a Gulf Breeze resident, was charged with multiple felony counts, including workers’ compensation fraud and grand theft. ”

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