State Fund Helps San Diego D.A. in Workers’ Comp, Unemployment Insurance Fraud Case

April 27, 2004

San Diego County Superior Court sentenced Big Bear Lake resident Donald Souza, owner of Donald Souza Construction Inc., to 181 days of home arrest and five years probation following his conviction on felony workers’ compensation and unemployment insurance fraud.

State Fund, which assisted the San Diego County District Attorney’s Office in its investigation, will collect approximately $60,000 in workers’ comp premiums owed to State Fund, which insured Donald Souza Construction Inc. from August 3, 2000 to October 10, 2002.

Souza was convicted of felony workers’ comp premium fraud (Insurance Code 11880), unemployment insurance fraud (Insurance Code 2117.5) and insurance violation 1871.4(a)(4), conspiracy to deny claim for injured worker, according to San Diego County Deputy District Attorney Ernie Marugg.

Souza was reportedly involved in a scheme to avoid paying workers comp premiums and employment taxes by using a third party (subcontractor) through which it would run its payroll. The subcontractor would later pay Souza employees in cash.

Donald Souza also conspired to deny a workers’ comp claim to one
of his employees. He offered his injured worker the sum of $2,000 in order for him not to report his injury to State Fund. The injured worker who suffered a severe foot fracture turned down the offer and filed a valid workers’ comp claim with State Fund.

The sentencing capped a multi-year investigation aided by State Fund.

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