Call for a FREE Consultation: (209) 323-5126Hablamos Espanol • Мы говорим по-русски
Call for a FREE Consultation: (209) 323-5126 Hablamos Espanol • Мы говорим по-русски

Call for a FREE Consultation: (209) 323-5126
Hablamos Espanol • Мы говорим по-русски

California Business Owners Charged with Fraud in Workers’ Compensation Scheme

Two owners and one associated business partner of a Walnut Creek construction and painting company have been charged in court for an insurance fraud scheme that cost carriers around $5 million. According to the Alameda County District Attorney’s Office and California Department of Insurance, “Eric Oller and Brian Mitchell each were charged with one felony count of conspiracy to commit a crime, six counts of felony insurance fraud, and two counts of workers’ compensation fraud,” Both business partners once owned Signature Painting and Construction, Inc.

Report by Authorities

California Business Owners Charged with Fraud in Workers' Compensation SchemeAuthorities report that Oller, who also owned Valhalla Construction, worked with Michelle using Valhalla as a shell company to pay their employees at Signature Painting and Construction (SPC) from 2017-18. The goal of this payment scheme through Valhalla construction was to reduce SPC’s workers’ compensation insurance premiums. SPC intentionally misrepresented or left out information about its structure and payroll costs to its insurance carriers to lower insurance premiums. Prosecutors also alleged that Michelle misclassified employees and underreported payroll costs to reduce insurance premiums. Michelle and Oller are also charged with moving employees from one company to another to save on workers’ compensation costs. The two business partners used A-1 World Class Painting to fraudulently obtain a workers compensation policy for Signature Painting and Construction. Signature Painting and Construction owners are alleged to have paid workers under the table and instructed their employees to report working for another company. This arrangement of various illegal and fraudulent activities between the two business owners and companies allowed them to avoid appropriately paying and reporting their taxes. 

Investigation Results and Reported Losses

The result of the investigation into the two Alameda County business partners found both parties to be in direct violation of California Insurance law and regulations with multiple felony counts of insurance fraud and on two counts of workers’ compensation fraud charges. Losses reported by the State Compensation Insurance Fund were found to be $3.1 million, and losses for AmTrust were reported at $1.9 million. With around $5 million in losses, the crimes stemming from 2015 are now coming to trial against the business partners. 

Workers Compensation Premium Fraud & The Ripple Effect

Workers’ compensation premium fraud is a form of insurance fraud committed when a business owner attempts to lower their insurance premium costs. This fraud is orchestrated by falsifying information that directly impacts their premium rate. This can include misclassifying employees, incorrectly reporting the number of employees on the company payroll, discouraging workers from reporting injuries, or denying employees filing an injury claim. Workers’ compensation premium fraud affects not only workers and law-abiding businesses, but the ripple effect also reaches consumers. Consumers can be directly affected by workers’ compensation insurance companies when they raise their premium rates for policyholders. When this happens, businesses may increase their costs for goods and services to compensate for rising insurance premiums.

At Stockton Workers Compensation P.C., Our team of qualified workers compensation attorneys is committed to fighting for those who have been the victims of workers compensation fraud and employee misclassification. If you have suffered losses in pay or have been denied proper compensation for your injuries or illness by your employer, our Stockton workers’ comp attorneys will work tirelessly by your side to get you the compensation you deserve.

To get started on your road to recovery and settlement, call us at (209) 323-5126 to take advantage of your FREE no-obligation consultation or visit our contact page to chat directly with an attorney member of our team.