California construction company charged in Workers' Compensation Fraud
Today we’re highlighting another case of alleged workers’ compensation fraud committed by an employer, this time in Riverside, Calif..
The owners of Banning Construction Company (also known as TF Ventures and All Service, Inc), are charged with an on-going scheme dating back to 2001 to defraud the state.
Carter Lee Pendergrass, 56, his son Joshua, 25, and their business associates, Timothy Cassidy and his wife, Karen, both 51, are each facing dozens of counts of insurance fraud, money laundering and filing false income tax statements, according to court documents. The charges involve collected losses over $6 million which include unpaid payroll taxes and lost money on insurance premiums.
Here's the recap of the story, according to local news coverage:
“According to Riverside County Deputy District Attorney Paul Fick, the Company….would deliberately misreport wages paid to its workers to avoid paying the full amounts due in state payroll taxes and workers comp insurance premiums. They would report a worker who earned $11 an hour for a 40-hour work week as working only 20 hours, but at $22 per hour,'' Fick said. ``That way, they saved more than half of the workers' comp insurance cost for that worker.''
This is another example of how business owners often exploit the WC system to their advantage to line their own pockets. Cases such as this chip away at the misconception that the workers are the ones taking advantage of the WC system. When you disregard the pervasive, sensationalistic stereotypes and anecdotes about undeserving injured workers defrauding the comp. system, and look at the actual numbers, employer and insurance fraud almost always exceeds worker fraud.