Wash. Contractor Cited for Fraudand Safety Violations

October 3, 2005

To combat fraud and protect workers from serious injury and death, the Washington Department of Labor and Industries has cited a Tacoma roofing contractor for workers’ compensation fraud and multiple safety violations.

An industrial insurance audit showed that Tacoma-based Armstrong Construction owed $3,642 in unpaid premiums for underreporting worker hours. The company had been audited twice before for the same problem, so was cited for a misrepresentation penalty of 10 times the amount owed, for an additional $36,420.

During the audit, L&I safety inspectors also were alerted to possible safety violations at the contractor’s job sites. Inspectors found ongoing problems, such as a supervisor and another employee working on a steep-pitched roof at heights of 12 and 30 feet without fall protection. Fall-protection equipment was available but was not being used.

The citations included $30,500 for two “willful,” one “repeat serious,” one “serious” and two “general” violations of safety regulations.

Serious violations are issued when failing to follow safety regulations is likely to result in death or serious injury. Willful is cited when an employer intentionally or knowingly violates rules or knows that a violation is occurring and is plainly indifferent to correcting it.

The company has 15 working days to appeal the safety citations.

Marines Plead Not Guilty to Felony Insurance Fraud

Three Marines based in Twentynine Palms, Calif., have pleaded not guilty to felony insurance fraud charges for allegedly filing a false claim that a vehicle was stolen and vandalized. The trio also pleaded not guilty to a misdemeanor count of filing a false police report, the California Department of Insurance Fraud Division said.

James Joseph Quiroga, 22, was charged with two counts of automobile insurance fraud and filing a false police report. Nicholas Vega Jr. and Shawn Paul Burrel, both 21, each were charged with one count of automobile insurance fraud and filing a false police report.

All voluntarily surrendered and entered pleas in Joshua Tree District Superior Court.

In fall 2004, an automobile insurance claim was submitted to Progressive Insurance for a collision that occurred before the policy was acquired, investigators said. Subsequent claims were made alleging the vehicle had been stolen and vandalized.

An investigation determined the defendants allegedly concealed and damaged the car themselves. No money was paid by Progressive, which said the claims amounted to about $20,000.

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Calif. State Fund to Collect $66,355
for Workers’ Comp Fraud

California Superior Court Judge Christopher G. Wilson has ordered the owner of three Humboldt County bars to pay State Compensation Insurance Fund $66,355.

Salvatore Constanzo of Eureka, Calif., was ordered to pay State Fund in restitution after his conviction for workers’ compensation insurance fraud, in which he underreported payroll, and misclassified and failed to report wages that were paid in cash.

State Fund, which insured Sidelines Sports, Sal’s OFF Broadway and Myrtlewood Lounge since 1992, uncovered the fraud during a claims review. State Fund assisted the Humboldt County District Attorney’s Office and the California Department of Insurance with an investigation of Constanzo’s policy. The investigation resulted in a conviction.

Man Arrested in Auto Scam

San Bernardino, Calif., District Attorney Investigators, working with the Newport Beach Police Department, recently arrested Michael David Hebert, 38, of Newport Beach, Calif., on suspicion of committing automobile insurance fraud.

On April 17, 2004, Hebert’s 2004 Mitsubishi Galant was involved in a hit and run accident with a semi truck and trailer on SR 60 near Archibald Ave., in the city of Ontario, Calif. The accident was investigated by the California Highway Patrol, which identified Hebert as the Mitsubishi’s driver. Hebert reportedly left the scene on foot prior to CHP’s arrival. The Mitsubishi was not drivable. Officials said Hebert reported his vehicle as stolen and submitted an insurance claim.

After an investigation by the District Attorney’s Office, several counts of insurance fraud were filed against Hebert, and a felony warrant was issued for his arrest.

District Attorney Investigators drove to Newport Beach and contacted detectives. Newport Beach detectives located Hebert’s place of employment and arrested him without incident.

Hebert was turned over to District Attorney Investigators and was booked into Newport Beach city jail on the felony warrant. Bail was set at $100,000.

Former Agent Sentenced for Selling

Fake Auto Policies

A former insurance agent has been sentenced after pleading guilty to one misdemeanor count of unlawful concealment of insurance payments.

The California Department of Insurance Investigation Division determined that former insurance agent Yvette Roberta Lopez of Camarillo, Calif., and her employee, Antonio “Tony” Briones, accepted more than $3,000 in insurance premiums, issued fraudulent insurance identification cards to victims and failed to remit premiums to insurance companies for automobile insurance policies.

The CDI Investigation Division worked with the Ventura County District Attorney’s Fraud Division on investigating Lopez, who operated Yvette R. Lopez Insurance Services in Ventura County, Calif., with offices in Santa Paula and Oxnard, Calif.

Victims allegedly were given insurance identification cards that were unauthorized by the insurance companies, and Lopez failed to remit the vehicle insurance premium payments to insurance companies. Victims discovered they were not insured when they failed to receive insurance documents. In one case, a victim was involved in a traffic collision with injuries and was notified by the DMV that he did not have valid insurance.

Lopez was sentenced to one day in county jail, 80 hours of community service, 36 months formal probation and ordered to pay restitution for one misdemeanor count of unlawful concealment of insurance benefits or payments.

Lopez pleaded guilty to the one misdemeanor count of unlawful concealment of insurance benefits or payments. Briones’ criminal case is still pending.