California company sued for payroll and insurance premium fraud
The California Department of Insurance is suing a San Mateo-based janitorial and pest control company for payroll and insurance premium fraud.
The department alleges that when applying for workers' compensation insurance, Genesis Building Services misrepresented both the number of employees working at the company and its payroll, and continued this deception during subsequent annual audits.
The CDI Fraud Division began investigating Genesis in 2008, as a result of suspicions by Redwood Fire & Casualty Insurance, from which Genesis purchased the insurance. The investigation found that Genesis president Teresa Reif allegedly under-reported $10,567,776.69 in payroll and avoided paying $2,957,089.20 in insurance premiums between 2005 and 2009.
"Business owners should be on notice - egregiously under-reporting wages to avoid premium payments will not go unpunished," said California Insurance Commissioner Dave Jones.
If convicted, Reif - who recently surrendered herself to the Redwood City Police Department - could face a $50,000 fine and/or up to five years in prison.
Anti-payroll legislation was recently introduced in the Senate that, if passed, would prevent employers from misclassifying their workers as independent contractors or non-employees in order to save money, resulting in increased costs for taxpayers.
The department alleges that when applying for workers' compensation insurance, Genesis Building Services misrepresented both the number of employees working at the company and its payroll, and continued this deception during subsequent annual audits.
The CDI Fraud Division began investigating Genesis in 2008, as a result of suspicions by Redwood Fire & Casualty Insurance, from which Genesis purchased the insurance. The investigation found that Genesis president Teresa Reif allegedly under-reported $10,567,776.69 in payroll and avoided paying $2,957,089.20 in insurance premiums between 2005 and 2009.
"Business owners should be on notice - egregiously under-reporting wages to avoid premium payments will not go unpunished," said California Insurance Commissioner Dave Jones.
If convicted, Reif - who recently surrendered herself to the Redwood City Police Department - could face a $50,000 fine and/or up to five years in prison.
Anti-payroll legislation was recently introduced in the Senate that, if passed, would prevent employers from misclassifying their workers as independent contractors or non-employees in order to save money, resulting in increased costs for taxpayers.
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