Sacramento siblings sentenced for workers’ compensation fraud
Michael George Mello Jr., 37, and his sister Mary Catherine Rodriguez, 38, owners of Sacramento-based Green Valley Landscaping Services, pleaded no contest on September 10, 2015 to workers’ compensation insurance fraud and tax evasion.
Between July 2010 and July 2013, the siblings conspired to commit workers’ compensation insurance premium fraud by significantly underreporting the number of employees and payroll in their business. By operating in California’s illegal underground economy, this fraud left employees at risk and homeowners who hired them financially vulnerable and liable for possible injuries.
In total, the defendants cheated workers’ compensation insurance carriers out of $144,672 in premiums and the Employment Development Department (EDD) out of $110,462 in payroll taxes.
“The underground economy is not a victimless crime,”said Insurance Commissioner Dave Jones. “Not only were numerous people in this case put at risk, but every consumer and legitimate business pays the price for workers’ compensation insurance fraud as insurers pass their losses on to policyholders and businesses then pass their increased costs to consumers.”
Mello was sentenced to 30 days county jail, 5 years formal probation and ordered to pay $144,672 in restitution to insurance companies and $110,462 to EDD. Rodriguez was sentenced to 3 years probation, 50 hours of community service and order to pay EDD $110,462 in restitution jointly with her brother.
This case is a result of a joint investigation by the department’s Fraud Division, EDD and the Department of Industrial Relations. The Sacramento District Attorney’s Office prosecuted this case.
2015 © Copyright Payroll Masters | Source: CA Department of Insurance
This document has been provided for informational purposes only and is not intended and should not be construed to constitute legal advice. Please contact your employment attorney in connection with any fact-specific situation in which you intend to take significant employment action. Readers agree that they will not hold Payroll Masters in indemnity and Payroll Masters assumes no liability. Payroll Masters is not engaged in rendering legal or accounting services. Therefore, Payroll Masters assumes no responsibility for claims arising from the use or implementation of the above information.