Pepperdine University and Janitorial Contractors Cited for Labor Violations
May 07, 2025 | JacobiJournal.com – The California Labor Commissioner’s Office has cited Pepperdine University and four janitorial contractors a combined $80,000 for violating state janitorial registration laws, raising concerns about labor compliance practices within higher education institutions. The Pepperdine labor violations case adds to a growing trend of enforcement actions targeting universities and large employers who fail to vet subcontractors properly. Labor advocates argue that unregistered janitorial firms often escape oversight, exposing workers to wage theft, unsafe conditions, and retaliation. California’s Labor Code Section 1432, enacted to address these very issues, plays a key role in maintaining accountability across contracted labor networks. This citation also reflects the Labor Commissioner’s continued focus on high-profile institutions, reinforcing that public image does not exempt employers from scrutiny. As universities increasingly rely on outsourced services, compliance with labor registration requirements is becoming a top priority for legal and risk departments across the state. Unregistered Contractors Trigger Citations The investigation revealed that Pepperdine hired unregistered janitorial companies, a direct violation of California Labor Code Section 1432, which mandates annual registration for all janitorial employers. As a result: Watchdog Referral Sparked Inquiry The Maintenance Cooperation Trust Fund, a watchdog organization that monitors janitorial labor practices, referred the case to state authorities. Their referral led to a deeper investigation into Pepperdine’s hiring practices. The Pepperdine labor violations case reflects a broader pattern observed in recent enforcement actions statewide, where institutions shift to lower-cost vendors without confirming regulatory compliance. Industry experts warn that failing to verify janitorial registration status can result in not only financial penalties but reputational harm—especially for universities expected to uphold high ethical standards. Labor advocates say such oversights enable exploitative working conditions to persist, particularly in sectors where immigrant and low-wage workers are overrepresented. Companies Operated Across Multiple States The cited contractors operated both in California and out of state, with locations in: The Labor Commissioner emphasized the importance of maintaining compliance not just within California, but also for companies working across state lines. For full details, refer to the California Department of Industrial Relations’ Janitorial Registration FAQs. Source FAQs: Pepperdine Labor Violations What laws did Pepperdine violate in the labor investigation? Pepperdine labor violations stemmed from hiring unregistered janitorial contractors, breaching California Labor Code Section 1432. The law requires janitorial employers to register annually with the state to protect workers from exploitation. Why were Pepperdine and the contractors fined $80,000? The Pepperdine labor violations resulted in a $40,000 fine for the university and $10,000 each for four janitorial vendors. These penalties address the use of unregistered service providers, which violates labor registration requirements. How do Pepperdine labor violations impact other institutions? Pepperdine labor violations could prompt more audits and stricter enforcement in higher education. Schools contracting with out-of-state vendors must ensure compliance with California labor laws. What is California Labor Code Section 1432, and why does it matter? Under California Labor Code Section 1432, all janitorial employers must register annually with the state to operate legally. This law aims to ensure employers meet basic compliance standards and uphold fair labor practices. The Pepperdine labor violations highlight the importance of this registration requirement in protecting vulnerable workers. What can universities do to avoid labor violations like Pepperdine’s? To avoid Pepperdine labor violations, universities must conduct due diligence when contracting service vendors. This includes verifying state registration, checking compliance history, and confirming that subcontractors meet all labor law requirements. Proactively reviewing vendor status through California’s labor enforcement portals can help prevent costly citations. For more updates on university labor law enforcement, compliance cases, and regulatory action across education and employment sectors, subscribe to JacobiJournal.com. 🔎 Read More from JacobiJournal.com:
Cupertino Electric Pays $1.4M in Back Wages for Labor Violations
May 7, 2025 | Jacobijournal.com – Cupertino Electric labor violations have resulted in a $1.4 million payout following a federal investigation by the U.S. Department of Labor. On May 7, 2025, JacobiJournal.com reported that the San Jose-based electrical engineering and construction firm failed to properly calculate overtime wages for more than 2,600 workers—violations that the Department’s Wage and Hour Division found to be in direct breach of the Fair Labor Standards Act (FLSA). The case underscores the ongoing scrutiny of wage practices across large infrastructure contractors in California and beyond, as federal agencies ramp up efforts to enforce compliance in industries prone to systemic payroll errors. Over 2,600 Workers Impacted According to the U.S. Department of Labor’s Wage and Hour Division, Cupertino Electric labor violations affected more than 2,600 employees across multiple job sites. The investigation revealed that the San Jose-based contractor failed to include non-discretionary bonuses—such as production-based incentives and performance bonuses—when calculating overtime pay rates, a clear violation of the Fair Labor Standards Act (FLSA). This miscalculation led to systemic underpayment for overtime hours, depriving employees of legally mandated compensation. The DOL emphasized that such practices not only violate federal labor law but also contribute to broader wage inequity within the construction industry. In response to the enforcement action, Cupertino Electric agreed to pay $1.4 million in combined back wages and civil penalties. The case reinforces federal regulators’ commitment to holding even established contractors accountable for Cupertino Electric labor violations that impact worker rights and payroll integrity. Longstanding Industry Presence Cupertino Electric has long been recognized as a leader in electrical engineering and large-scale infrastructure development, servicing both private and public sector clients nationwide. From commercial campuses to mission-critical facilities, the company’s portfolio spans multiple states and industries. However, the recent Cupertino Electric labor violations expose a troubling disconnect between its operational excellence and internal compliance systems. The Department of Labor’s findings point to persistent gaps in payroll oversight, particularly in the treatment of non-discretionary bonuses—common in performance-driven environments like construction and engineering. These oversights not only compromised wage accuracy for thousands of employees but also signaled a breakdown in regulatory due diligence. For a firm of Cupertino Electric’s scale, such violations may trigger increased federal scrutiny, reputational risks, and calls for improved workforce protections across the broader industry. DOL Reinforces Employer Responsibilities “Employers must accurately calculate overtime pay and include all required compensation, such as bonuses, when determining the correct rate,” said a representative from the Department of Labor. “Failure to do so violates workers’ rights and creates unfair labor conditions.” This case serves as a reminder that even large firms are not exempt from compliance. Employers must regularly audit their payroll systems to avoid wage violations that could result in costly penalties. Source FAQs: Cupertino Electric Labor Violations and FLSA Compliance What labor laws did Cupertino Electric violate? Cupertino Electric labor violations stemmed from improper overtime calculations under the Fair Labor Standards Act. The company failed to include non-discretionary bonuses in the overtime pay rate, violating federal wage laws. How many workers were affected by Cupertino Electric labor violations? Over 2,600 employees were impacted by Cupertino Electric labor violations. These workers were underpaid for overtime, prompting the Department of Labor to enforce back pay and penalties totaling $1.4 million. What should employers learn from Cupertino Electric labor violations? Cupertino Electric labor violations highlight the importance of correctly calculating overtime pay, including performance bonuses. Employers should regularly audit payroll systems to stay FLSA-compliant and avoid federal penalties. For more updates on labor enforcement, wage recovery cases, and employment law compliance, subscribe now to JacobiJournal.com. 🔎 Read More from JacobiJournal.com:
Court Overturns $1.84 Million Jury Award for Work Injury Claim
May 5, 2025 | JacobiJournal.com — Work injury claim overturned: a California appellate court overturned a $1.84 million jury verdict awarded to a subcontractor’s employee who was injured on the job. The ruling highlights the limits of liability for general contractors in workplace injury lawsuits Worker Claimed Unsafe Conditions Caused Injury The injured worker sued the general contractor after falling through an unguarded skylight. He alleged that unsafe work conditions were to blame. A jury initially agreed and awarded him nearly $2 million in damages. Defense Challenged Liability However, the defense argued that the worker was not authorized to be in the area where he fell. They claimed he acted outside the scope of his job duties and ignored safety rules. The general contractor filed a motion for nonsuit, asserting they had no legal duty in this specific situation. Appellate Court Overturns Verdict On appeal, the court found that the general contractor did not owe the injured worker a duty of care. They emphasized that general contractors are not automatically responsible for the safety of subcontractor employees—especially when those employees violate safety protocols. Moreover, the court noted that the worker’s own employer bore primary responsibility for his supervision and safety. Broader Implications This decision may influence future workplace injury lawsuits in California. It clarifies that general contractors are not liable unless they directly control the worksite in a way that contributes to the injury. Therefore, injured workers must prove more than just unsafe conditions—they must show a clear duty of care. Source: Court Overturns $1.84 Million Jury Award for Work Injury Claim FAQs: About the California Work Injury Claim Ruling What happened in the California work injury claim case? A California appellate court overturned a $1.84 million jury award in a work injury claim, ruling the general contractor was not legally responsible. Why was the work injury claim verdict overturned? The court found that the general contractor did not owe a duty of care in this work injury claim because the injured worker violated safety protocols. What does this ruling mean for future work injury claim cases? Future work injury claim cases may require workers to prove that a general contractor had direct control over unsafe conditions that caused the injury. Get expert insights into legal trends, verdicts, and policy shifts affecting workers’ compensation law. Visit JacobiJournal.com for the latest updates and expert commentary on high-stakes litigation. 🔎 Read More from JacobiJournal.com:
San Joaquin County DA Secures Felony Conviction in Workers’ Comp Fraud Case
May 02, 2025 | JacobiJournal.com – San Joaquin workers comp fraud enforcement took center stage as the County DA’s Office secured a felony conviction in a high-profile case, reinforcing its strong stance against insurance fraud and abuse in the region. Stacy Johnson pled guilty to two felony charges: Penal Code 487 (Grand Theft) and Penal Code 550(b)(3) (Insurance Fraud). As a result, he was sentenced to four months in County Jail, two years of felony probation, and ordered to pay $3,000 in investigative restitution and $2,000 to his former employer, Amazon, for the stolen goods. San Joaquin Workers Comp Fraud: Faked Robbery and Claim According to prosecutors, Johnson conspired with others to stage a robbery of an Amazon delivery truck he was driving. He then filed a fraudulent workers’ compensation claim, falsely citing “physiological injuries and stress” as a result of the staged incident. This case of San Joaquin workers comp fraud highlights how individuals may attempt to exploit the system for financial gain through deceitful means. If the fraud had not been detected, the false claim could have cost an estimated $35,000—a burden likely to be passed on to consumers through increased prices and higher insurance premiums for local businesses. The successful prosecution of this San Joaquin workers comp fraud serves as a warning that such criminal acts will face serious consequences. DA’s Office Sends a Message District Attorney Ron Freitas emphasized the broader implications of San Joaquin workers comp fraud, stating: “Workers’ compensation fraud is NOT a victimless crime — it affects all of us. It drives up costs for local businesses and raises prices for the goods we rely on every day.” Freitas added that the DA’s ongoing outreach campaign makes it clear: San Joaquin County will not tolerate workers’ comp fraud. Those San Joaquin workers who commit it will be prosecuted to the fullest extent of the law. Impact of San Joaquin Workers Comp Fraud on Local Employers and Consumers This San Joaquin workers comp fraud case underscores the significant financial and social impact such crimes have on the community. When fraudulent claims are filed, local employers like Amazon face increased insurance premiums, which can lead to higher operational costs. These costs often trickle down to consumers through elevated prices on everyday goods and services. Moreover, legitimate injured workers may experience delays or increased scrutiny in receiving their rightful benefits due to the increased burden on the workers’ compensation system. By prosecuting San Joaquin workers comp fraud aggressively, the DA’s Office helps protect honest workers and local businesses, ensuring that the workers’ compensation system remains fair and sustainable for everyone involved. This case serves as a clear deterrent to potential fraudsters and reinforces the message that deceitful practices will be met with serious legal consequences. Source: San Joaquin County DA Office FAQs: San Joaquin Workers Comp Fraud What is the penalty for San Joaquin workers comp fraud? Penalties for San Joaquin workers comp fraud can include jail or prison time, probation, restitution payments, and a permanent felony record, depending on the severity of the offense. How does the DA detect workers comp fraud cases? The San Joaquin County DA’s Office works with insurance investigators, employers, and law enforcement to gather evidence such as witness statements, surveillance footage, and claim records to uncover fraudulent activity. Why is prosecuting San Joaquin workers comp fraud important? Prosecuting San Joaquin workers comp fraud helps protect honest workers, keeps insurance premiums stable for employers, and prevents higher costs for consumers. Explore the latest case law, convictions, and enforcement efforts at JacobiJournal.com. We deliver expert insights to help professionals stay informed and protected. 🔎 Read More from JacobiJournal.com:
Amazon Driver Sentenced for Workers’ Comp Fraud in Staged Robbery Scheme
April 25, 2025 | JacobiJournal.com — Compensation fraud was at the center of a recent case in which a former Amazon delivery driver was sentenced to jail for orchestrating a fake robbery and filing a fraudulent workers’ compensation claim. Stacy Johnson, the driver, admitted to staging the incident in a failed attempt to collect benefits for stress and physical injuries that never occurred. Jail Time, Fines, and Probation Handed Down The San Joaquin County District Attorney’s Office announced that Johnson will serve four months in county jail. In addition, he will be on probation for two years and must pay $5,000 in financial penalties. This includes $2,000 in restitution to Amazon and $3,000 to reimburse investigative costs. “Workers’ compensation fraud is not a victimless crime,” said District Attorney Ron Freitas. “It directly impacts local businesses and ultimately drives up the cost of goods for all consumers.” How the Fraud Unfolded Amazon Driver Sentenced: According to investigators, Johnson staged the robbery of his own Amazon delivery truck and then filed a false claim for psychological trauma and physical ailments. However, the ruse quickly unraveled under scrutiny. Had the fraud gone undetected, Amazon would have paid nearly $35,000 in unwarranted benefits. More importantly, that financial burden would likely have been passed on to customers through higher retail prices. Crackdown on Workers’ Compensation Fraud Authorities have made it clear: San Joaquin County will not tolerate attempts to exploit the workers’ compensation system. As part of a broader campaign to eliminate insurance fraud, prosecutors are targeting these cases with renewed urgency. “This successful prosecution shows our ongoing commitment to exposing and stopping fraud,” Freitas added. “We will protect our workers and our economy.” Why It Matters Cases like this highlight how fraudulent claims can damage trust in legitimate systems. While the workers’ compensation program exists to support injured employees, abuse by a few undermines its credibility for all. Moving forward, local officials plan to continue public outreach efforts and collaborate with employers and insurers to stop similar schemes early.surance fraud: authorities are watching, and consequences will follow. Source: San Joaquin County District Attorney’s Office FAQs: Workers’ Compensation Fraud Cases in California What is workers’ compensation fraud? Workers’ compensation fraud occurs when someone intentionally provides false information to receive benefits they are not entitled to, such as staged injuries or incidents. What penalties can result from workers’ compensation fraud? Penalties can include jail time, fines, probation, and restitution payments to employers or insurers, depending on the severity of the fraud. How can companies prevent workers’ compensation fraud? Companies can prevent workers’ compensation fraud by conducting thorough claim investigations, implementing fraud detection training, and partnering with law enforcement. Visit JacobiJournal.com for ongoing coverage, legal analysis, and expert commentary on fraud investigations nationwide. 🔎 Read More from JacobiJournal.com:
Workers’ Compensation Fraud Scheme Targeted Spanish-Speaking Workers in California
April 25, 2025 | JacobiJournal.com — In a major crackdown, four individuals—among them two attorneys—face felony charges after investigators uncovered a large workers’ compensation fraud scheme aimed at Spanish-speaking workers across Southern California. The fraudulent operation allegedly netted over $550,000 in unlawful referral fees and compromised more than 1,100 legitimate injury claims. Investigation Reveals Call Center Operating Out of Mexico In October 2022, the California Department of Insurance launched a probe following reports that a call center based in Mexico was contacting Spanish-speaking workers with deceptive promises. These callers reportedly told individuals they could receive money by simply filing a workers’ compensation claim. However, investigators found that in many cases, victims were manipulated into signing official claims documents without full understanding. These completed claims were then illegally sold to attorneys in exchange for referral fees, violating California law. “This is a disturbing case of alleged fraud that preyed on vulnerable, hardworking people,” said Insurance Commissioner Ricardo Lara. “These crimes threaten the integrity of our workers’ compensation system and will not be tolerated.” Arrests and Charges Filed Against Four Defendants The Department of Insurance, in collaboration with the San Bernardino County District Attorney’s Office, arrested the following individuals: How the Scheme Unfolded From January 2022 to September 2023, Franco allegedly sold 320 clients to De La Garza and Leal for $168,750. Additionally, from September 2021 through October 2024, she sold 798 clients to Gluck for $388,500. Given that the average workers’ compensation claim costs approximately $13,000, according to the 2024 WCIRB report, the total projected loss from the scheme exceeds $14.5 million. Legal Action and System Integrity The San Bernardino County District Attorney’s Office is now prosecuting the case. Authorities emphasize the need to protect injured workers from exploitation, especially within immigrant and vulnerable communities. Source: California Department of Insurance FAQs: Workers’ Compensation Fraud Case What is workers’ compensation fraud in California? It’s when someone knowingly lies or withholds facts to obtain workers’ compensation benefits they’re not entitled to. Why were Spanish-speaking workers targeted in this fraud? The scheme exploited language barriers, misleading workers into filing claims without understanding the documents. What is the potential loss from this workers’ compensation fraud case? Authorities estimate losses exceed $14.5 million, based on the average cost of affected claims. How does California law penalize workers’ compensation fraud? In California, workers’ compensation fraud can lead to felony charges, significant fines, restitution orders, and potential prison time. Penalties depend on the scale of the fraud, the defendant’s criminal history, and whether multiple victims or vulnerable populations were targeted. Stay ahead of emerging fraud trends in workers’ comp. Visit JacobiJournal.com for the latest updates and legal insights. 🔎 Read More from JacobiJournal.com:
CAAA: Combating Fraud in the Workers’ Compensation System
April 24, 2025 | JacobiJournal.com — Workers’ compensation fraud in California is a major concern for both employers and employees, impacting the integrity and cost of the entire system. Fraud in the workers’ compensation system not only drives up insurance premiums but also delays benefits for legitimately injured workers. The California Applicants’ Attorneys Association (CAAA) has been at the forefront of addressing these issues, advocating for reforms, and ensuring the protection of workers’ rights while maintaining the integrity of the system. The Scope of Workers’ Comp Fraud Fraud within the workers’ compensation system can take many forms. It can involve workers who exaggerate injuries or claim benefits they are not entitled to, as well as employers and medical providers who engage in deceptive practices to reduce their financial responsibilities or inflate claims. These fraudulent activities undermine the efficiency of the system and can have wide-reaching consequences for businesses and employees alike. The CAAA emphasizes the importance of addressing fraud not only through legal and regulatory measures but also by fostering a culture of transparency and accountability within the workers’ compensation process. Fraudulent claims can result in increased premiums for employers, ultimately affecting their ability to provide jobs and maintain operations. Additionally, workers may suffer as well, as fraudulent practices can delay legitimate claims, leading to unnecessary financial strain. Legal Protections and Reforms In response to growing concerns about fraud in the system, CAAA works closely with legislators to advocate for reforms that reduce fraudulent activities while still ensuring that workers who are legitimately injured receive the benefits they deserve. This includes advocating for more stringent vetting processes for medical providers, better oversight of claims processing, and stronger penalties for those caught committing fraud. The association also pushes for initiatives that educate workers about their rights and the claims process to help them avoid being targeted by fraudsters. CAAA’s ongoing efforts seek to strike a balance between protecting workers’ rights and ensuring that fraud does not undermine the workers’ compensation system. Combating Fraud in the Workers’ Comp System: What Employers Can Do Employers also play a key role in preventing workers’ compensation fraud. By implementing effective safety protocols, training employees on proper injury reporting procedures, and maintaining open communication with claims adjusters, employers can reduce the likelihood of fraudulent claims. Additionally, employers should actively participate in audits and investigations related to their workers’ compensation policies to identify potential fraudulent activities early. Conclusion: A Call for Action As the workers’ compensation system continues to evolve, tackling fraud remains a priority. The CAAA’s efforts to address this issue are crucial in ensuring a fair and functional system for all involved parties. By strengthening legal protections, promoting transparency, and fostering collaboration between employers, employees, and lawmakers, California can combat fraud effectively while safeguarding workers’ rights. Source FAQs: Workers’ Compensation Fraud in California What role does CAAA play in preventing workers’ compensation fraud? CAAA advocates for legislative reforms, improved oversight, and stronger penalties to deter workers’ compensation fraud while protecting injured workers’ rights. How can employers help reduce workers’ compensation fraud? Employers can implement safety programs, train staff on injury reporting, and cooperate with claims adjusters to identify and prevent fraudulent claims early. Why is workers’ compensation fraud a problem for employees? Answer: Fraudulent claims can delay legitimate benefits, strain the system, and lead to higher insurance costs that ultimately impact workplace stability. Stay updated on fraud-related issues and other workers’ comp news by visiting JacobiJournal.com. 🔎 Read More from JacobiJournal.com:
Fresno Executives Sentenced in Pension, Workers’ Comp Fraud Case
April 17, 2025 | JacobiJournal.com – Fresno Executives Sentenced behind a long-running fraud operation will now serve time in federal prison. A U.S. District Court sentenced Marcus Asay, 69, and Antonio Gastelum, 53, for their roles in an elaborate scheme that targeted over 3,000 victims nationwide. Judge Dale A. Drozd sentenced Asay to five years and Gastelum to two years in prison. Their company, Agricultural Contracting Services Association—doing business as American Labor Alliance (ALA)—must also pay a $2.5 million fine. Additionally, both Asay and ALA owe $69,250 in restitution. Fraud Spanning Nearly a Decade A federal jury convicted the defendants in June 2024 after a five-week trial. Prosecutors proved that from 2011 to 2019, Asay and Gastelum orchestrated multiple fraudulent operations through ALA, including pension fraud, workers’ compensation fraud, and an Affordable Care Act (ACA) exemption scam. They also laundered money to cover their tracks. How the Pension Scheme Worked Asay and Gastelum promised clients that their retirement savings would grow through a 401(k) plan managed by ALA. However, instead of investing those funds, the duo diverted the money for personal use. They splurged on fine dining, rare coins, online companionship services, and rent for Asay’s upscale lakefront home in Fresno. To conceal the missing funds, they redirected revenue from their workers’ compensation scam and falsely labeled it as pension money. This manipulation led to over $620,000 in losses. Fresno Executives Sentenced Faking Workers’ Compensation Coverage In a separate scam, the defendants falsely claimed that national insurance carriers backed ALA’s workers’ comp policies. They issued forged certificates and policy declarations to customers in California and other states. Many businesses relied on those documents to stay compliant and retain contracts. Rather than admit wrongdoing, Asay actively discouraged customers from cooperating with investigators. Authorities later confirmed the policies had no backing from legitimate insurers. This part of the scheme brought in $2.25 million in premiums. Misleading Health Insurance Exemption Offers Additionally, ALA sold fake ACA hardship exemptions to consumers for hundreds of dollars. In reality, only the federal government can issue such exemptions—and qualified individuals can receive them at no cost. By misrepresenting this process, ALA exploited consumers who were seeking relief from healthcare penalties. Lies Under Oath Add to Their Sentences Both Asay and Gastelum took the stand in their defense. However, the court found they lied under oath, which resulted in longer prison sentences. Their perjury underscored their continued intent to deceive, even during trial. Broad Investigation, Federal Charges Federal agents from multiple agencies collaborated to bring the case to court, including: Assistant U.S. Attorneys Michael Tierney, Joseph Barton, and Stephanie Stokman led the prosecution, which ultimately held the perpetrators accountable. Read the official U.S. Attorney’s Office press release on Fresno Executives Sentenced for full case details and court statements. FAQs: Fresno Executives Sentenced 2025 What crimes were the Fresno executives sentenced for? The Fresno executives were sentenced for pension fraud, workers’ compensation fraud, ACA exemption scams, and money laundering. How long will the Fresno executives sentenced in 2025 serve in prison? Marcus Asay received five years, and Antonio Gastelum received two years in federal prison for their roles in the fraud scheme. What restitution must the Fresno executives sentenced in this fraud case pay? They must pay $69,250 in restitution and a $2.5 million fine as part of their sentence. Stay informed with the latest updates on insurance fraud, workers’ compensation violations, and more at JacobiJournal.com. 🔎 Read More from JacobiJournal.com:
New York Inspector Uncovers $2.7M Workers’ Comp Fraud in 2024
April 17, 2025 | JacobiJournal.com – New York workers’ comp fraud surged in 2024, with Inspector General Lucy Lang reporting $2.7 million in fraudulent activity, marking a nearly 30% increase over 2023. Lang also confirmed 14 arrests, another sharp rise from the prior year. The Inspector General’s findings underscore how New York workers’ comp fraud continues to evolve, creating costly risks for insurers, employers, and state agencies. Significant Recoveries for the State In total, Lang’s office helped recover more than $1.4 million in restitution and fines, returning critical funds to state agencies, insurers, and employers. She shared the figures during an April meeting of the Workers’ Compensation Board. Major Cases from the Inspector General’s Report Lang’s annual report highlighted several high-impact investigations, including: A Call for Continued Oversight Lang emphasized the importance of vigilance in identifying fraud within both public and private sectors. Her office continues to oversee workers’ compensation cases across multiple state agencies, reinforcing efforts to protect taxpayer funds and ensure benefits go only to those who qualify. Source: New York State Inspector General – 2024 Annual Report AQs: About New York Workers’ Comp Fraud What is the scale of New York workers’ comp fraud in 2024? Inspector General Lucy Lang reported $2.7 million in New York workers’ comp fraud cases in 2024, nearly 30% higher than the prior year. Which industries were most impacted by New York workers’ comp fraud? Fraud ranged across sectors, including medical billing, construction, logistics, and public service, highlighting vulnerabilities in both private and public systems. How does the state respond to New York workers’ comp fraud cases? The Inspector General’s office investigates and prosecutes fraud, often recovering restitution. In 2024, more than $1.4 million was returned to agencies and insurers. Stay informed on major fraud cases and enforcement actions—subscribe to JacobiJournal.com for expert analysis, timely updates, and in-depth coverage of workers’ comp fraud. Read More from JacobiJournal.com
LA Couple Sentenced for Underreporting Payroll, Filing False Workers’ Comp Claims
April 15, 2025 | JacobiJournal.com – LA Couple Sentenced: John Nemandoust, 70, and Annette Assil, 62, were sentenced after an investigation uncovered their scheme to underreport over $21 million in payroll and submit false workers’ compensation claims. Nemandoust will serve 60 days in county jail, while Assil will serve 30 days. Both face 10 years of felony probation and must pay $2.2 million in restitution for unpaid workers’ compensation premiums. The LA couple sentenced in this case drew significant attention from state regulators because of the scale of the fraud and the direct impact on California’s workers’ compensation system. Authorities emphasized that the outcome reinforces how aggressively prosecutors are pursuing employers who attempt to evade insurance requirements through underreporting or false claims. Investigation Reveals Extensive Underreporting The California Department of Insurance (CDI) initiated the investigation into the couple’s three businesses: A-1 Valley Services, Prompt Delivery, and Affordable Messenger. From 2013 to 2017, the couple failed to secure workers’ compensation coverage for two of the companies. Only A-1 Valley Services had insurance, leaving Prompt Delivery and Affordable Messenger uninsured. The couple sentenced for these violations not only underreported payroll but also left employees vulnerable by operating without proper coverage. Investigators noted that uninsured operations put both workers and legitimate businesses at risk, since fraud of this scale shifts costs onto honest employers and weakens the integrity of the workers’ compensation system. Filing False Claims to Evade Payments When employees from the uninsured companies were injured, the couple allegedly filed false claims under the A-1 Valley Services policy. Investigators discovered that the couple misreported $25 million in payroll, only reporting $1.4 million to their insurance carrier. This allowed them to avoid paying $3 million in premiums. The couple sentenced in this case used fraudulent claims not just to sidestep premium payments, but also to conceal the true scale of their business operations. Prosecutors stressed that these actions undermined the workers’ compensation system, creating unfair advantages over law-abiding employers and placing legitimate insurance carriers at financial risk. Court’s Ruling and Sentence The Los Angeles County District Attorney’s Office prosecuted the case. Nemandoust and Assil will serve their sentences and face continued supervision under probation. Source: California Department of Insurance – CDI Press Release FAQs: LA Couple Sentenced Workers Comp Fraud What were the charges in the LA couple sentenced workers comp fraud case? They were convicted of underreporting $21 million in payroll and filing false workers’ comp claims to avoid $3 million in premiums. How much restitution was ordered in the LA couple sentenced workers comp fraud case? The court ordered $2.2 million in restitution for unpaid workers’ compensation premiums as part of the sentencing. Why is the LA couple sentenced workers comp fraud case significant? It highlights how California authorities, including CDI and local prosecutors, pursue large-scale fraud schemes to protect workers and ensure fair premium payments. What penalties did the face beyond restitution? In addition to paying $2.2 million in restitution, the couple sentenced received county jail time and 10 years of felony probation, ensuring long-term oversight of their activities. How does the case impact other California employers? The couple sentenced case serves as a warning to other business owners that underreporting payroll or filing false claims can lead to severe legal consequences, including jail, probation, and financial penalties. Stay updated on major workers’ comp fraud cases—subscribe to JacobiJournal.com for breaking news, expert analysis, and enforcement updates. Read More from JacobiJournal.com