State Fund Awarded $800,000 in Fraud Case

State Compensation Insurance Fund will collect $800,000 in restitution from two former owners of a San Diego County-based construction company. The award followed their guilty plea on felony workers’ compensation insurance fraud and tax evasion charges in San Diego County Superior Court.
State Fund—whose audits played a critical role in the San Diego County District Attorney’s investigation—will collect approximately $800,000 in workers’ comp insurance premiums owed the Fund under the plea bargain by Fallbrook resident Robert Covington, 44, and Del Mar resident Donald Huffman, 62.

Covington and Huffman—who also pleaded guilty to tax evasion charges—owned C & H Framing, insured by State Fund from 1998 through 2003. State Fund audits revealed that Covington and Huffman reportedly falsified information to avoid paying proper workers’ comp premiums beginning in 2000 through 2002.

Covington and Huffman—who pleaded guilty to felony counts involving workers’ comp insurance fraud (Insurance Code 11880), state income and payroll tax evasion and conspiracy to file false tax returns—are scheduled to be sentenced in San Diego County Superior Court. Both defendants could face up to five years and eight months in prison.

The two men—who have already paid approximately $182,000 in restitution to the State Franchise Tax Board—will also have to pay restitution to the State Employment Development Department under the plea bargain which capped a multi-year investigation aided by State Fund.

Topics Fraud Workers' Compensation