Ogden, Calif., Investor Facing Felony Fraud Charges

November 20, 2006

A businessman heavily invested in the redevelopment of Ogden’s blighted downtown is facing felony charges of insurance fraud in California.

Gadi Leshem, president and chief executive officer of Cover-All Inc., a flooring installer, is accused with two others of cheating California out of $11 million in worker’s compensation insurance premiums.

Leshem, 59, pleaded not guilty to four felony counts of insurance fraud and one count of conspiracy in Los Angeles County Superior Court this week.

His attorney, Mark Werksman, said he expects the charges to be dismissed. Werksman said the case is “no reflection on Mr. Leshem’s interests in Utah or other businesses, which are all conducted lawfully and ethically.”

A spokeswoman for the California Department of insurance said that between 2001 and 2005 Leshem and other company executives saved money on insurance premiums by underreporting the number of company employees to the state insurance fund.

Leshem has played central role in a plan to develop Ogden as a recreational hub. He’s bought up 28 parcels of vacant commercial land and last year produced a video — “Ogden: It’s all Within Reach” — designed to promote the city, including a plan for a downtown urban center linked by gondola to a mountain resort.

Leshem’s investment in Ogden property is estimated to be worth about $1.5 million.

Cover-All employs 1,500 people nationwide, including dozens in Salt Lake City and Ogden.

Others named in the case are Zeev Golan, company vice president, and Irit Golan, Cover-All’s corporate secretary and payroll supervisor.

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