Fraud Roundup

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San Diego Roofing Contractor Sentenced
San Diego County Superior Court Judge David Danielsen has sentenced a roofing contractor to a six month jail term, three years formal probation and ordered him to pay $272,000 in restitution to California’s State Compensation Insurance Fund as part of his sentence on felony workers’ compensation and unemployment insurance fraud.

William J. Kennedy, 39, owner of San Diego-based Kennedy Roofing that was insured by State Fund, also was ordered to serve 160 hours of volunteer work. His jail sentence is stayed, provided he completes probation terms. Kennedy, who violated insurance code and unemployment insurance code has already paid $200,000 of the restitution owed to State Fund.

The fraud was reportedly discovered through a State Fund audit of Kennedy’s business records after one of his employees filed a workers’ comp claim.

Kennedy reported he did not have employees or payroll covering the injury period. The audit also uncovered that Kennedy misclassified payroll by falsifying his employees’ hourly rate and hours on time cards. State Fund submitted its suspected fraud case to the San Diego County District Attorney’s Office for its review.

Trio Nabbed in Calif. Auto Vandal Scam
Two Sacramento residents and one Galt, Calif., resident have been arrested for their alleged involvement in a “staged auto vandalism” ring, according to the California Insurance Commissioner’s office.

The case involved a suspected scam in which multiple insurance policies were allegedly secured by the three suspects for two automobiles. The group allegedly then filed multiple claims for an incident of vandalism using each of the policies. Brian Keith Talley, 35, and Lillybeth Tirado, 29, both of Sacramento; and Michael George Fischer, 44, of Galt, were charged with one felony count of conspiracy and filing multiple insurance claims for the same loss. Bail was set for each at $10,000.

Talley and Tirado surrendered at the Sacramento County Main Jail; Fischer was arrested at his residence on Jan. 26. The Sacramento County District Attorney’s Office is prosecuting the case.

Authorities believe that Talley, along with two associates, acquired six separate insurance policies in each of their names on two vehicles. Claims for the same act of vandalism, mostly paint scratches to all vehicle panels, were then filed on each of the different policies. Payments were made on three of those claims totaling more than $12,000 before the alleged fraud was discovered. The potential loss to the insurance carriers would have exceeded $30,000 had the alleged fraud gone undiscovered.

The continuing investigation is being conducted by the Sacramento County Urban Auto Insurance Fraud Task Force, which is comprised of investigators with the California Department of Insurance, the Sacramento County District Attorney’s Office, and the California Highway Patrol.

The auto fraud task force, in operation since January 2001, targets any form of organized auto insurance fraud, including staged theft and vandalism rings, staged accident rings, and med-legal mills.

Various agencies assisted in the investigation of the three suspects in this case, including the National Insurance Crime Bureau and the special investigative units of Western United Insurance, Farmers Insurance, State Farm Insurance, Allstate Insurance, and Mercury Insurance companies.

Calif. Chiropractor Arrested for Fraud
Michael Keklikian, 38, has been arrested by investigators from the California Department of Insurance Fraud Division. Keklikian was arrested on a $30,000 felony warrant charging him with one count of Penal Code Section 550 (a) (1), insurance fraud. If convicted, Keklikian could face up to five years in state prison and/or a fine of up to $50,000 or double the amount of the fraud.

According to investigators, Michael Keklikian, a licensed chiropractor with a practice in Glendale, Calif., suffered a water loss on July 7, 2004 at his residence in Northridge, Calif. The loss resulted in damage to several rooms in the residence. He submitted an estimate for repairs to State Farm Insurance in the amount of $168,443. The estimate was on the letterhead of contractor Martin Nehme doing business as Universal Tile. State Farm paid the claim based on the estimate. Keklikian contacted State Farm and advised that he had additional damage and provided a supplemental estimate in the amount of $38,604. The supplemental estimate was also submitted on the letterhead of contractor Martin Nehme.

The investigation revealed that both estimates submitted by Keklikian were fraudulent, CDI said. Contractor Martin Nehme was interviewed and he stated he did not prepare or sign the estimates submitted by Keklikian. Nehme stated that he was hired by Keklikian to perform tile work repair and only provided a contract for $13,000 for the completed work. The case was completed by Investigators from CDI’s Valencia Regional Office and is being prosecuted by the Los Angeles County District Attorney’s Office.

Calif. Man Arrested on Workers’ Compensation Fraud
California Insurance Commissioner John Garamendi has announced the arrest of Alejandro Ruiz Lopez, 26, on felony charges of workers’ compensation fraud after an investigation revealed that Lopez allegedly falsified a claim stemming from his broken leg.

Lopez was arrested by investigators from the California Department of Insurance’s Fraud Division and booked into the Los Angeles County jail on $20,000 bail. On July 8, 2003, while working as a carpenter for TR Wurster Construction, Lopez alleged that he fell off a scaffold and broke his right leg. He reported a work-related injury and, as a result, the State Compensation Insurance Fund paid him $13,779.22 in benefits.

On Oct. 30, 2003, TR Wurster discovered that Lopez allegedly broke his leg not at work, but while playing soccer. The company immediately alerted SCIF, which subsequently notified the Fraud Division. The case was forwarded to the Ventura County District Attorney’s Office, which issued an arrest warrant for Lopez on Nov. 1, 2004. However, after the arrest warrant was issued, Lopez fled the state and took refuge in Oklahoma City, Okla.

Lopez was arrested by fraud investigators who staked out his scheduled Workers’ Compensation Appeals Board hearing.

SCIF’s Special Investigative Unit and the Ventura County District Attorney’s Office assisted with the investigation.

Unlicensed Contractors Arrested in Sting
Police in Napa, Calif., arrested seven unlicensed building contractors who showed up to bid on repairing a 121-year-old Victorian house that was damaged during New Year’s weekend flooding, authorities said.

The arrests were part of a sting operation set up by state regulators in the wake of Napa and nine other California counties being declared disaster areas where homeowners and businesses are eligible for federal aid.

“Many homeowners, even outside the flood zone, don’t realize that unlicensed operators rarely, if ever, carry workers’ compensation insurance on their employees,” said Steve Sands, registrar of the Contractors State License Board.

California law requires contractors who perform work costing more than $500 in labor and materials to be licensed by the state board.

The seven arrested were charged with misdemeanors that carry maximum penalties for a first offense of six months in jail and a $1,000 fine, although contracting without a license in a disaster area also can lead to felony charges. None of them were jailed.

The sting was held in a home damaged by heavy rains and flood waters from the Napa River. More than a dozen contractors showed up to present bids to state licensing officials, who were posing as homeowners.

The board reminded property owners needing repairs to verify that their contractors are licensed either online at www.cslb.ca.gov or calling 1-800-321-CSLB.

Topics California

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