Janitorial Company Owners Face Charges for Allegedly Underreporting Payroll by over $2.4 million

Janitorial Company Owners Face Charges for Allegedly Underreporting Payroll by over $2.4 million
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Jose Arredondo, aged 50, and his wife Olga Chaves, aged 45, faced arraignment today on charges of insurance fraud following a California Department of Insurance investigation.

Allegations suggest that the couple, owners of a janitorial company based in Fontana, systematically underreported their company’s payroll by over $2.4 million. This purported action was intended to circumvent workers compensation insurance premiums and evade payroll taxes.

The investigation commenced after an employee of the janitorial company sustained a workplace injury, prompting the insurance company providing workers  compensation coverage to suspect fraudulent activity. Subsequent inquiries revealed discrepancies regarding the company’s coverage period and employee tenure, indicating a lack of prior insurance coverage for workers.

Further scrutiny uncovered a history of non-compliance with insurance audits, with Arredondo and Chaves allegedly switching insurance carriers upon audit notifications. This pattern, coupled with alterations to business names, ownership, and addresses, enabled the couple to manipulate their reported payroll figures, resulting in significant premium reductions and evasion of taxes.

An audit revealed substantial payroll underreporting totaling approximately $2,408,584, leading to an estimated premium loss of $436,717. The San Bernardino County District Attorney’s Office is overseeing the prosecution of this case

Janitorial Company Owners Face Charges for Allegedly Underreporting Payroll by over $2.4 million was last modified: May 28th, 2024 by admin
Categories: San Bernardino

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