A licensed general contractor and owner of a Marin County, Calif., roofing company has pled guilty to workers’ compensation insurance premium fraud, unemployment insurance fraud and filing false income tax returns-potentially costing up to $1.4 million in combined losses.
An 18-month multi-agency state investigation revealed that Kenneth Scott Cooper, 50, of San Rafael, Calif., failed to accurately report his employee payroll at Ken Cooper Roofing and Gutter Systems of Marin County from 1999 to 2003. Cooper pled guilty to the charges in Marin County. The investigation included the California Department of Insurance (CDI), State Compensation Insurance Fund (SCIF), Franchise Tax Board (FTB), Employment Development Department (EDD) and the Marin County District Attorney’s Office, which filed charges against Cooper on May 10.
A multi-agency audit for the period Jan. 1, 1999, through Nov. 7, 2003, revealed that Cooper intentionally underreported his payroll to SCIF for the purpose of obtaining workers’ compensation insurance at less than the appropriate rates. The audit determined that Cooper owes SCIF approximately $550,000 in premiums. Additionally, the investigation revealed that Cooper was paying some of his employees a lower hourly wage than he reported to SCIF, artificially reducing his premiums. He also paid a portion of his employees’ payroll in cash, enabling him to understate the total payroll he paid his employees to both SCIF and EDD. This saved him in annual premiums and employment taxes.
According to investigators, Cooper owes EDD more than $308,000 in taxes, penalties and interest. FTB also conducted an investigation into Cooper’s state income tax returns and determined that he filed false returns from 1999 through 2003 and will owe FTB approximately $485,000 in taxes, tax penalties and interest. Cooper pled guilty to violating the California Insurance Code, the California Unemployment Insurance Code and the California Revenue and Taxation Code. Cooper will be formally sentenced and full restitution determined in the Marin County Superior Court on Jan. 13, 2006.
Calif. Physician Sentenced for Eight Years
A Brentwood, Calif., physician who pleaded no contest to fraud charges in three separate cases was sentenced to an eight-year prison term and ordered to pay his victims $5 million, the District Attorney’s office announced.
Deputy District Attorney Albert MacKenzie said Parviz Kahn Berjis, 71, was sentenced by Los Angeles Superior Court Judge Larry Fidler. Berjis pleaded no contest to one count of automobile insurance fraud, one count of workers’ compensation insurance fraud and one count of tax evasion. He also admitted the loss from the crimes was more than a half-million dollars.
MacKenzie, with the District Attorney’s Fraud Interdiction Program, said Berjis was charged in three separate cases. One involved a long-running workers’ comp fraud case in which the County of Los Angeles was victimized. Another involved an automobile insurance fraud case in which the State of California, the Automobile Club of California and several insurance companies were victims. Berjis also was charged with evading hundreds of thousands of dollars in state taxes.
The prosecutor said the cases were investigated by the District Attorney’s Bureau of Investigation and the California Franchise Tax Board. Berjis was first arrested in August 2003. The cases were filed against him in 2003 and 2004.
MacKenzie said Berjis had his medical license suspended in 2003.
The $5 million restitution includes $2.8 million to the state Franchise Tax Board and $2.2 million to the Los Angeles County.
Agent Arraigned on Felony Charges
and Grand Theft
An insurance broker-agent has been arraigned in Los Angeles County Superior Court on two felony counts of financial elder abuse and four felony counts of grand theft following a two-year investigation by the California Department of Insurance (CDI) Investigation Division.
Salvatore Amando Hurdle, 68, of Hawthorne, Calif., was booked into the Los Angeles County Jail after his arrest by the CDI Fraud Division. If he is convicted of the charges, he could also face special enhancements for the two elder abuse counts, potentially lengthening a prison term. Bail was set at $175,000 for Hurdle, who remains in custody.
According to investigators, from 2001 to 2005 Hurdle, who owns and operates Price Line Insurance Services Inc., collected more than $38,000 in premiums from owners and drivers of commercial trucking companies, yet neglected to place the insurance coverage. The policyholders were at risk of losing approximately $250,000 due to non-coverage.
The case is being prosecuted by the Los Angeles County District Attorney’s Office of Elder Abuse.
According to investigators, Hurdle provided the victims with bogus insurance documents, leading them to believe that they had been insured.
Some victims did incur losses resulting from accidents and vehicle vandalism that happened while they were unknowingly uninsured. Hurdle had been operating under a suspended corporate license.
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