A San Diego businessman was ordered to pay $153,779 in restitution to California’s State Compensation Insurance Fund as part of his conviction on workers’ compensation fraud. Marco Rangel pleaded guilty to one count of insurance fraud and one count of tax evasion. San Diego County Superior Court Judge Stephanie Sontag sentenced Rangel to one day in custody and three years of probation.
Marco Rangel operates High Quality Drywall, a San Marcos, Calif.-based drywall business. SCIF has provided workers’ compensation coverage for Rangel’s business since 2003. In 2005, an employee of Rangel was injured and a claim was submitted to State Fund. During the claim investigation, a State Fund adjuster discovered the injured worker was paid cash wages. The tip regarding cash payments was forwarded to State Fund’s Special Investigation Unit (SIU) who conducted an investigation that included a review of prior audits of the business as well as an interview of the claimant. SIU submitted its suspected fraud case to the San Diego County District Attorney’s Office.
The San Diego DA’s office later issued a search warrant on Rangel’s company and seized business records. The audit confirmed the fraud to not only include cash payments, but the misclassification of employees in lower class codes in order pay lower workers’ compensation premiums.
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