Trio of San Jose Area Suspects Nabbed in $26,000 Workers’ Comp Fraud Scam

In California, a plumbing company owner, his employee, and the employee’s girlfriend have been arrested and charged with multiple counts of felony workers’ compensation insurance fraud after an investigation found that they reportedly bilked insurers out of at least $26,000.

The business owner, Lyle Edward Eddlemon, 67, of San Jose, was arrested last Saturday at San Francisco International Airport and then booked into the San Mateo County jail. He was released after posting $40,000 bail. The other two suspects, Joseph Thomas Mijares, 40, and Dawn Hannah Kaiser, 48, both of Copperopolis, surrendered to authorities after their April 28 arrests and were booked into the Santa Clara County jail. They were also released on $40,000 bail.

The two-year investigation into the case, focusing on a business called “Drain Busters,” was conducted by the California Department of Insurance Fraud Division, the Santa Clara District Attorney’s office, and the California Employment Development Department (EDD).

The investigation found that Eddlemon hired Mijares in 2001 despite knowing that Mijares was receiving workers’ comp benefits from a reported injury at another plumbing company. Eddlemon reportedly paid Mijares with checks made out to his girlfriend, Dawn Kaiser, in order to conceal his employment at Drain Busters. Kaiser was never an employee of the company.

Evidence seized from Eddlemon’s residence during the investigation revealed that he also underreported employee wages to the State Compensation Insurance Fund and to Farmers Insurance in order to obtain a lower workers’ comp premium.

It also found that he did not report cash he paid to day laborers to either insurance carriers or to the EDD. According to investigators he owes approximately $263,900 in taxes, penalties, and interest.