The California Department of Insurance announced that Mark Jerome Gentry of Antioch, Calif., entered a guilty plea on June 23, 2005 to multiple counts of grand theft in the Contra Costa County Superior Court. Gentry was sentenced to three years state prison, ordered to pay restitution totaling more than $1.3 million, and taken into custody.
The guilty plea resulted from an extensive investigation conducted by CDI’s Investigation Division into the insurance business activities of Gentry and Contractors Bond Brokerage Inc., a specialized insurance producer in the San Francisco Bay Area. The investigation revealed that Gentry stole more than a million dollars of insurance premium and collateral paid by numerous construction firms.
Investigators found that beginning in 1997, Gentry began selling and issuing unauthorized performance bonds for which he collected over $200,000 in insurance premium payments. Gentry then failed to remit the premium to various insurance companies. He also issued fraudulent insurance documents to numerous consumers, assuring the consumers that they in fact had insurance coverage.
In 2001, Gentry’s appointments to sell insurance as an agent of a company were cancelled. Having no insurance market to place coverage with, Gentry began selling bogus insurance performance bonds. Gentry issued fraudulent certificates of insurance and collected and diverted to his personal use an additional $564,000 of insurance premium payments, and more than $541,000 of cash collateral.
Mother-Daughter Team Arrested
Two Kern County farm labor contractors surrendered to authorities July 12 after a two-year investigation found that they had allegedly under-reported their business’ payroll by $1 million. The investigation began after a routine audit by State Compensation Insurance Fund that discovered an altered financial record.
Rosalinda “Rosie” Gonzalez and Sandra Lara, both of McFarland, California, were arraigned in Kern County Superior Court on felony and misdemeanor violations stemming from their operation of Sweet Valley Harvesting, a farm labor contracting business in Bakersfield.
When State Fund identified the alleged unreported payroll, Sweet Valley Harvesting was asked to pay a supplemental bill of approximately $72,000. Gonzalez and Lara, a mother and daughter team, allegedly subsequently closed the business. However, shortly after that, Gonzalez allegedly opened a new firm called Rosie’s Farm Service, using the same employees, equipment, and location. She also reportedly secured workers’ comp coverage with State Fund.
As part of the investigation, the CDI worked with the Kern County District Attorney’s Office and State Fund to obtain payroll documents from a large business that contracted with Rosie’s Farm Service. The documents showed that Gonzalez had allegedly continued to under-report business payroll and misclassify the type of work the employees were doing in her new company. After auditing the payroll of Rosie’s Farm Service, State Fund discovered the company owed more than $64,000 in unpaid workers’ compensation insurance premiums.
Prior to the filing of a criminal complaint, Gonzalez paid $64,000 in workers’ comp insurance premiums for Rosie’s Farm Service, and $13,000 towards the balance owed for Sweet Valley Harvesting. Bail for the pair was set at $7,500 each.
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