Employee Injury Leads To Discovery of Alleged Workers’ Compensation Fraud
Photo: Herbert Allen Kelly III
Approximately $730,175 in medical and disability have been paid to date by State Compensation Insurance Fund (SCIF) to a workers’ compensation claim after an employee of Kelly Roofing Company fell 25 feet while working at a job site on January 12, 2015.
During the post-accident Cal/OSHA inspection, the owner of the Sacramento County based company, 65-year old Herbert Allen Kelly III, stated he had three employees.
The number of employees Kelly stated worked for his company did not coincide with the yearly audits SCIF conducted to verify premium and payroll.
From December 2012 to December 2013, Kelly approximated $31,685 in payroll. From 2014 to 2018, Kelly reported $0 in payroll and zero employees. This clashed with his claim filed in 2015 when his employee fell 25 feet and was subsequently paid out over $730K in medical and disability.
To explain the discrepancy, Kelly stated the injured party worked for him solely one day for $500 dollars which resulted in no payroll records.
When the Department of Insurance detectives served search warrants on Kelly and Kelly Roofing Company’s bank accounts, records showed $89,781 in payroll and upwards of 15 employees.
The information was forwarded to Kelly Roofing Company’s insurer, SCIF, who determined they were owed $50,000 in unpaid past premiums.
Legally, this underreporting equates to six felony counts of workers’ compensation fraud. Kelly was arrested on 10/25/2019. His case is being prosecuted by the Sacramento County District Attorney’s Office.
Photo from CA Department of Insurance