Insurance Fraud NEWS
California construction firm alters payroll records, steals $6M
April 24, 2019, Paramount, CA
A brother and sister who run a construction company in Paramount have admitted to their roles in a $6 million workers' compensation fraud and labor theft scheme, the Los Angeles County District Attorney's Office announced today.
Enrique Vera, 49, of Tarzana, who owns Ultimate, Inc., pleaded no contest yesterday to one felony count each of workers' compensation fraud and grand theft of labor, according to Deputy District Attorney Christopher Hartman of the Healthcare Fraud Division. Gloria Vera, 58, who is the company's office manager, pleaded no contest to one felony count each of workers' compensation fraud and insurance fraud.
They both admitted an allegation of committing fraud and embezzlement that resulted in a loss of more than $500,000 to the State Compensation Insurance Fund.
Sentencing is scheduled for Oct. 22, 2020, in Department 37 of the Foltz Criminal Justice Center.
Under the terms of a negotiated plea agreement, the defendants must pay restitution of $6.3 million and more than $5,000 in investigative costs to SCIF. They also are required to pay $30,000 in fines, have one year of electronic monitoring, complete 500 hours of community service and comply with SCIF in future business dealings.
If all of the requirements are completed successfully, the defendants' convictions will become misdemeanors and they will be placed on 18 months of summary probation.
Failure to comply with the terms of the plea agreement could result in a sentence of eight years and eight months in state prison to be served in local custody for Enrique Vera and nine years for Gloria Vera.
According to the prosecutor, the siblings submitted altered payroll records to SCIF in order to pay a reduced premium on the construction company's workers' compensation insurance.
Additionally, Gloria Vera failed to disclose and concealed employees' on-the-job injuries that entitled them to workers' compensation. Enrique Vera underpaid employees the required prevailing wage as a contractor for a student housing renovation project at UCLA.
The crimes occurred from Jan. 1, 2012, through March 31, 2017.
Case BA472360 was investigated by the District Attorney's Office, Bureau of Investigation, with assistance from SCIF.