If they underpaid by $7.6M they should pay that back – plus interest. I’m a big fan of making anyone found cheating the workers’ comp system paying back the full amounts plus interest. That’s a fairly good deterrent right there – if you get caught you lose everything you stole plus interest.
I think Poizner can hold the corporate officers personally responsible. The corporate veil can be pierced easily on this one as the accused acted grossly negligent.
If it was plain negligence the officers would be safe, but there is an element of intentional fraud. With it being an intentional act, no insurance or bankruptcy coverage will work.
We audit for employers in CA often. There is quite a bit of fraud from the insurance company side, also.
Since this is a criminal fine, I don’t think they can squirm out of it should they file bankruptcy. It’s good to see them hammer these guys. In my state the prosecutor regularly cuts the premium in half and gives them 2 years to pay it back interest free under a deferred prosecution agreement. Why pay for WC when you can get it for half the cost and have no criminal record? What kind of deterrence is that!?
They, the compnay owners and/or officers need to be persnaly responsible, pay back with intrest, fine, jail time and a public statement apologizing for thier wrong doing or lack of over site.
why do they owe less than the amount revealed that they owe? I know payroll is a rolling “thing” and so is reporting but why pay less than the amount revealed? and why aren’t there any punitive damages to force these theives out of business? Make them sell everythuing they own in this world to make this right!! and where’s some jail time also? this is way too forgiving. they are the source of some much greif for CA Employers across the board.
The majority of corporations formed today are very loosely formed and do not conform to all the requirements set forth by the department of corporations. This is especially trus in the case of small businesses where there are only one or two shareholders. The shareholders fail to hold the requisite meetings, keep minutes of meetings etc… The end result is that any good attorney will be able to pierce the corporate veil and go after the assets of the principals involved and the courts tend to rule in favor of the victims when piercing that veil.
I completely agree that cheaters should be caught and punished for their behavior and that even an outrageous work comp rate per $100 of payroll is NEVER justification for payroll fraud.
Having said that – did anyone catch the apparent rate this company was being charged….over $28 per hundred – California is known as one of the most expensive – if not the most expensive state – with which to do business.
It’s impossible to know if this is the actual rate and if there was possibly some experience that factored into the apparent high rate….either way – high rates can be the only motivation needed for some operators to skirt the rules. I’m not saying it makes it right – just offering a different perspective.
someone close to me recently got a $550k settlement for a fraudulent california worker’s comp claim. She told me from the beginning that the incident did not even happen. Then she masterfly laid down this hoax and very sophisticated fraud. How do I report this outrage, and to whom?
Is there any likelyhood of a jail term on a conviction??
We have updated our privacy policy to be more clear and meet the new requirements of the GDPR. By continuing to use our site, you accept our revised Privacy Policy.
If they underpaid by $7.6M they should pay that back – plus interest. I’m a big fan of making anyone found cheating the workers’ comp system paying back the full amounts plus interest. That’s a fairly good deterrent right there – if you get caught you lose everything you stole plus interest.
Just like any judgement, collecting would be the problem. Now the company can declare bankruptcy & walk away.
I agree anyone cheating insurance, be it Work Comp, Health, Disability or Social Security Disability should be made to pay back with HIGH interest.
I think Poizner can hold the corporate officers personally responsible. The corporate veil can be pierced easily on this one as the accused acted grossly negligent.
If it was plain negligence the officers would be safe, but there is an element of intentional fraud. With it being an intentional act, no insurance or bankruptcy coverage will work.
We audit for employers in CA often. There is quite a bit of fraud from the insurance company side, also.
Since this is a criminal fine, I don’t think they can squirm out of it should they file bankruptcy. It’s good to see them hammer these guys. In my state the prosecutor regularly cuts the premium in half and gives them 2 years to pay it back interest free under a deferred prosecution agreement. Why pay for WC when you can get it for half the cost and have no criminal record? What kind of deterrence is that!?
They, the compnay owners and/or officers need to be persnaly responsible, pay back with intrest, fine, jail time and a public statement apologizing for thier wrong doing or lack of over site.
why do they owe less than the amount revealed that they owe? I know payroll is a rolling “thing” and so is reporting but why pay less than the amount revealed? and why aren’t there any punitive damages to force these theives out of business? Make them sell everythuing they own in this world to make this right!! and where’s some jail time also? this is way too forgiving. they are the source of some much greif for CA Employers across the board.
The majority of corporations formed today are very loosely formed and do not conform to all the requirements set forth by the department of corporations. This is especially trus in the case of small businesses where there are only one or two shareholders. The shareholders fail to hold the requisite meetings, keep minutes of meetings etc… The end result is that any good attorney will be able to pierce the corporate veil and go after the assets of the principals involved and the courts tend to rule in favor of the victims when piercing that veil.
I completely agree that cheaters should be caught and punished for their behavior and that even an outrageous work comp rate per $100 of payroll is NEVER justification for payroll fraud.
Having said that – did anyone catch the apparent rate this company was being charged….over $28 per hundred – California is known as one of the most expensive – if not the most expensive state – with which to do business.
It’s impossible to know if this is the actual rate and if there was possibly some experience that factored into the apparent high rate….either way – high rates can be the only motivation needed for some operators to skirt the rules. I’m not saying it makes it right – just offering a different perspective.
someone close to me recently got a $550k settlement for a fraudulent california worker’s comp claim. She told me from the beginning that the incident did not even happen. Then she masterfly laid down this hoax and very sophisticated fraud. How do I report this outrage, and to whom?
Is there any likelyhood of a jail term on a conviction??