Father and Son Arrested in California for Workers Comp Fraud

May 16, 2006

Glendale, Calif., car wash owners Shagen Galstanyan, 51, and his son, Vahe Tergalstanyan, 23, have been arrested for workers’ compensation insurance fraud. Both suspects were booked into the Riverside County Jail with bail set at $25,000 each, according to the California Department of Insurance.

Galstanyan and Tergalstanyanwere arrested on May 10, 2006, and are both being charged with making knowingly false statements and attempting to deny workers’ compensation benefits to an injured employee, Pedro Velasquez.

The two suspects owned two car washes in Moreno Valley – the Alessandro Car Wash and the Sunnymead Car Wash. On March 4, 2004, CDI said Velasquez suffered severe lacerations to his right hand when it got caught in the wheel of a vehicle moving along a conveyor belt at the Sunnymead Car Wash. Coworkers drove Velasquez to the Moreno Valley Community Hospital, where treatment was rendered. Shortly thereafter, Galstanyan arrived at the hospital and demanded that Velasquez be relocated to a different facility; he then drove the employee to the Riverside County Regional Medical Center in Moreno Valley. Galstanyan allegedly told Velasquez to remove his work shirt in the parking lot before walking into the emergency room. He further allegedly instructed the injured worker to lie and say that he was cut by glass at home, instead of reporting the truth about his injuries. Galstanyan left Velasquez at the entrance to the emergency room and shortly thereafter, his son Tergalstanyan arrived to continue monitoring the employee and his communications with hospital staff. The emergency room personnel found inconsistencies with Velasquez’s story and were able to obtain the true facts of his work related injury. The injured worker did receive the necessary treatment and follow-up under the employer’s workers’ compensation insurance benefits.

If convicted, both suspects are facing imprisonment in county jail for one year, or in state prison for two to five years, or by a fine not exceeding $150,000 or double the value of the fraud, whichever is greater, or by both imprisonment and fine.

This investigation was conducted as part of the Workers’ Compensation Fraud Program at the CDI Fraud Division in Rancho Cucamonga. The crimes are felonies and are being filed by the Riverside County Office of the District Attorney. Galstanyan and Tergalstanyan also attempted to conceal information about the true nature of the employee’s injury from their insurance carrier, Safeco Insurance. Safeco Insurance has not yet calculated an exact dollar loss due to the fraud, but CDI said the company has been helpful during the criminal investigation. Safeco’s Special Investigative Unit assisted in the investigation.

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