View this article online: https://www.claimsjournal.com/news/west/2006/08/24/71700.htm
Martha P. O’Neill, 40, of San Francisco, has been arraigned on 49 felony counts of alleged workers’ compensation insurance premium fraud and employment tax fraud, according to the California Department of Insurance. O’Neill was arrested on Aug. 2, 2006, in Atlanta and remained in custody with a $1 million bail until she was arraigned at the San Francisco Hall of Justice. O’Neill is the corporate officer of Avoca Trucking and Excavating (AT&E) company.
The investigation was led by the California Department of Insurance’s (CDI) Fraud Division with assistance from the Employment Development Department (EDD).
According to investigators, O’Neill owned and operated AT&E since 1996 as a general engineering and building contractor. O’Neill worked primarily for the City and County of San Francisco and other Bay Area cities and counties. To do so she was required to comply with state laws, wage and union requirements. She employed more than 100 employees from Jan. 1, 2001 through June 9, 2005.
On June 9, 2005, with assistance from the EDD and the Franchise Tax Board, search warrants were served at five locations, including O’Neill’s residence, her AT&E business, her bank institution and storage locations.
O’Neill allegedly underreported her employee payroll to State Compensation Insurance Fund (SCIF) by $2.2 million and to EDD by $3.1 million. As a result, SCIF was defrauded out of $283,528.44 in premiums and EDD was defrauded out of $629,235.18 in payroll taxes (including penalties and interest).
O’Neill was charged with five felony counts of premium fraud; five felony counts of preparing false documents; three felony counts of knowingly providing a forged or fraudulent document; 30 felony counts of employment tax fraud; and four felony counts of taking a portion of workers’ wages in connection with a public works project.
In addition, the San Francisco District Attorney’s office has filed an enhancement charge as the taking of funds allegation exceeds $150,000. Upon conviction, an additional term of two years may be imposed. An additional enhancement charge of aggravated white collar crime was also filed as the loss exceeds $500,000. Upon conviction, an additional sentence of two, three, or five years may be imposed.
The cost of AT&E’s workers’ comp insurance is determined by the rate of pay for their employees, the total amount of earnings their employees receive and their job classifications. O’Neill is alleged to have underreported AT&E’s payroll and workers’ comp payroll reports to SCIF while intentionally making material misrepresentation to the insurance carrier for the purpose of paying a lower premium from Jan. 1, 2001 through Aug. 31, 2004.
Additionally, two employees were injured on the job while working for AT&E, and AT&E reportedly failed to report those injuries to the insurance companies, thus affecting the risk to the insurance company and its exposure to loss. AT&E is also accused of denying proper benefits to these two employees after they were injured on the job.
O’Neill also allegedly fraudulently misrepresented the AT&E payroll to San Francisco City and County Office of Labor Standards, the Operators Engineers Union, the Laborers Union and the San Francisco Tax Assessor’s office. Her next court date is scheduled for September 27 in San Francisco.
Source: CDI