Grand Jury Indicts San Diego Employers for Unemployment and Workers Compensation Fraud
In January 2014, San Diego County District Attorney, Bonnie M. Dumanis announced charges against four businesses, the owners, and several employees who were indicted on various types of insurance fraud including workers compensation fraud, unemployment fraud, and tax evasion.
It is estimated that insurance fraud costs Americans $80 billion a year, and, in California costs consumers $15 billion annually.
In December for their roles in bilking insurance companies and us out of $1.5 million, the grand jury indicted owners of:
- A1 Patio and Remodeling Experts in Encinitas.
- Christina Engineering in Escondido.
- Quality Way Building Maintenance in National City.
- Rufino’s Landscaping of Escondido.
This list the grand jury indicted includes:
Russ E. Kubart, A1 Patio and Remodeling Experts. When Kubart’s employee injured himself after falling from a deck at a jobsite, Kubart told the employee to tell medical staff he injured himself at home because Kubart did not have workers’ compensation insurance. Loss to known victims is $160,000.
Ten employees of Christina Engineering for their roles in receiving unemployment benefits at the same time Christina Engineering paid cash for them to work. Loss to known victims is $350,000.
Marcos Castaneda, Quality Way Building Maintenance, on four counts of felony insurance fraud for his role in intentionally lying about his payroll in order to receive reduced workers’ compensation premiums. Loss to know victims is $133,921.
Rufino’s Landscaping owners, Rufino Aguiluz and his wife, Maria Foulk, on several counts of insurance fraud, payroll tax evasion, and income tax evasion for their roles in failing to report payroll to various workers’ compensation insurance carriers and tax collectors. Loss to known victims is $952,202.
The integrity of the California workers' compensation system depends on employers, workers, insurers, and providers working together in good faith. Last fiscal year 2012-2013, California Department of Insurance received more than 5,000 referrals for suspected workers' compensation fraud, with losses totaling more than $340 million.
Businesses that commit workers’ compensation premium fraud not only raise costs for their honest competitors, but they also put the health and financial well-being of their workers at risk.
Our investigators assisted the San Diego District Attorney's Office and our sister tax agencies in the arrests and indictments of these suspects.