California farm labor company owners and siblings Elias Perez, 40, of Greenfield, and Alejandra Perez, 37, of Soledad, were arraigned on over 20 felony counts of insurance and tax fraud after allegedly underreporting payroll by over $17 million resulting in a loss of over $1.42 million to their insurance companies.
The California Department of Insurance discovered the alleged fraud after learning that an injured employee was treated out of a garage by an unlicensed professional.
The Perezes are owners of farm labor contracting companies in Greenfield called PFL Contracting Inc., Future Ag Management Inc. and Future Harvesters and Packers Inc., which primarily hire farm labor employees to harvest crops.
An investigation by the CDI found on June 28, 2016, an employee of one of the Perezes’ businesses, FAM, sustained a work-related injury to their back when they tripped and fell while harvesting crops. The Perezes along with a FAM supervisor allegedly did not provide the injured employee with the required professional medical treatment. For two weeks, the FAM supervisor reportedly took the injured worker to seek treatment from an unlicensed professional who operated a business out of their garage.
More than two weeks after the employee’s injury, Elias Perez filed a workers’ comp claim with their insurance company and stated the employee’s injury occurred on July 7, 2016.
FAM and FHP obtained workers’ comp policies from two different insurance companies. A comparison of records from the insurance companies and the California Employment Development Department reportedly showed large discrepancies in the payroll reported by the Perezes. From July 2014 to August 2017, they allegedly reported to EDD that FAM and FHP paid $28,521,347 in wages while reporting only $23,246,922 to their insurance companies for the same time period.
As a part of the investigation, the CDI served bank search warrants and conducted a thorough review and audit of the payroll checks, which determined that FAM and FHP from July 2014 to August 2017 actually paid over $41 million in wages. They allegedly underreported over $17 million in wages, which resulted in roughlly $1.42 million in premium owed to their insurance companies. In addition, the Perezes allegedly underreported PFL, FAM and FHP’s wages by approximately $12.8 million to EDD resulting in potentially $1.28 million in unpaid taxes.
FAM also maintained a workers’ comp policy with another insurance company for the Perezes’ farm labor contracting operation in Arizona. Records obtained from that insurance company and the Arizona Department of Economic Security reportedly indicated additional discrepancies in their reporting and was included in this audit and investigation.
Elias Perez was charged with five felony counts and Alejandra Perez was charged with 21 felony counts. Both were arraigned on Wednesday in Monterey County Superior Court. The Monterey County District Attorney’s Office is prosecuting this case.
Topics California Workers' Compensation
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