Jay Haas, Sr., 67, of Campbell, California, and his daughter, Kimberly Ann Haas, 44, of San Jose, Calif., have been arrested on multiple felony counts related to workers’ compensation insurance premium fraud. Mr. Haas faces 11 counts; Ms. Haas faces one count.
The Haases allegedly underreported their companies’ payrolls from October 1, 2003, through February 11, 2008, to avoid payin g $1,028,640 in premiums to State Compensation Insurance Fund (SCIF), Virginia Surety Co., and Reinsurance Corporation of America, the California Department of Insurance reported.
The arrests were the result of an investigation conducted by the California Department of Insurance’s Enforcement Branch (CDI) and the Santa Clara County District Attorney’s Office, which is prosecuting the case. Search warrants were executed on the Haas’ residences, businesses, and several residential construction projects. Business, banking, and payroll records were seized. The subsequent forensic audit helped lead to yesterday’s arrests.
CDI received a suspected fraudulent claim referral from SCIF in January 2007. SCIF was reviewing a June 2005 claim made by an injured worker of R J Haas Construction Corp. that had been initially denied because Mr. Haas maintained he did not have any employees, and that subcontractors did all the work for his company. However, during the life of his SCIF policy, four workers’ compensation claims were filed by injured employees.
The ensuing investigation allegedly revealed that the Haases, through various companies, misrepresented office staff, project superintendents, foremen, and even some of their own family members as subcontractors, and habitually failed to report accurate employee payroll.
Source: CDI
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