Morteza Jafari, 46, and Mozghan Tavakoli, 37, a married couple who owned and operated a general contracting company called Sedcon; and Vicki Baltierra, 36, a Sedcon employee; were arrested and charged with 16 counts of workers’ comp insurance fraud. The arrests stemmed from a joint investigation by the CDI, the Department of Labor Standards Enforcement (DLSE) and the Employment Development Department (EDD).
In August 1999, CDI received a complaint from SCIF that Sedcon had allegedly misclassified their employees. The majority of Sedcon’s business consists of public works projects, where the contractor is mandated by law to pay the state’s prevailing wage. In May 2000, CDI served search warrants to the following: the Sedcon office in Arcadia; the residence of Morteza Jafari and Mozghan Tavakoli in Sierra Madre; the Sedcon accountant’s office in Torrance; Sanwa Bank in Arcadia; and Bank of America in Glendale.
Evidence revealed that Sedcon had underreported the payroll they had submitted to SCIF and EDD. In addition, the number of employees didn’t match up to the numbers reported to EDD. Sedcon had also reported to SCIF that their employees earned $20 or more per hour- another untrue fact revealed by a CDI and DLSE investigation.
The DLSE audit found that $198,473 is due in back wages to Sedcon employees. According to investigators, these premium fraud practices allowed Sedcon to reduce costs and underbid competitors.
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