Janitorial Company Owners Face Charges for $2.4 Million Payroll Fraud (CA Department of Insurance)

Janitorial Company Owners Face Charges for $2.4 Million Payroll Fraud

Friday, May 24th, 2024 Fraud Insurance Industry Litigation Workers' Compensation

The owners of a janitorial company in San Bernardino, California, have been arraigned on multiple felony counts of insurance fraud. An investigation by the California Department of Insurance revealed that the couple allegedly underreported their payroll by over $2.4 million. This scheme allowed them to avoid significant workers’ compensation insurance premiums and payroll taxes.

The investigation commenced after an employee sustained a work-related injury, prompting suspicion from the insurance provider. Findings indicated that the company, Team Janitorial, had inconsistent workers’ compensation coverage and frequently changed insurance carriers and business details to avoid audits and reduce insurance costs. The couple reportedly misrepresented their payroll and employment practices, further complicating the investigation.

Audits showed that the company’s actual payroll from April 2018 to September 2023 was over $2.5 million, while the reported amount was significantly lower. The fraudulent underreporting led to a premium loss of approximately $436,717. The San Bernardino County District Attorney’s Office is handling the prosecution of this case.


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External References & Further Reading
https://www.insurance.ca.gov/0400-news/0100-press-releases/2024/release018-2024.cfm

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