Cashing in on Fraud

Following a four-and-a-half-year investigation and prosecution by CDI, the Employment Development Department (EDD) and the San Mateo County District Attorney’s Office, Laurence Bennett Guy was sentenced in Superior Court, County of San Mateo, on five felony counts of insurance fraud, tax fraud and money laundering.

Guy, owner of Guy’s Roofing in Redwood City, Calif., received one year in county jail plus five years of supervised probation. He was also ordered to pay $800,000 in restitution to several insurance agencies, the CDI and the EDD, and to surrender to the San Mateo County Jail on Oct. 6, 2001, to begin his jail sentence. Guy has thus far paid an amount slightly more than $100,000 in restitution.

Guy allegedly developed a scheme in which he paid his workers in cash for all overtime hours and some straight time, thereby underreporting his payroll taxes and reducing his workers’ compensation premiums. This allowed Guy’s Roofing to underbid competing roofers in the Bay Area, who were paying their share of taxes and insurance premiums as required by law.

Employees allegedly were ordered to create false certificates of workers’ comp coverage to show to insurance companies and tax auditors.