Kings County Business Owners Arraigned for Alleged $30 Million Workers’ Compensation Fraud

Kings County Business Owners Arraigned for Alleged $30 Million Workers’ Compensation Fraud
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An alleged $30 million workers’ compensation fraud scheme has resulted in two Kings County business owners being arraigned on multiple felony counts.

Ruben Perez Mireles Jr., 49, of Clovis, and John Mena, 29, of Lemoore, were arraigned on charges of insurance fraud, grand theft, and tax fraud, among other charges, according to a press release by the California Department of Insurance.

The arraignment on June 11 followed a task force investigation that found that the two had allegedly underreported over $29.2 million in payroll for multiple businesses to illegally save on workers’ compensation insurance premiums and taxes.

Mireles and Mena operated two Kings County farm labor contracting companies, Vista Pacific Labor Solutions, Inc. and Calzona Ag Management, Inc.

Prosecutors have accused Mireles, owner of Vista Pacific Labor Solutions, Inc., of underreporting $7.6 million in employee payroll to his workers’ compensation insurance carrier from September 2019 through August 2020.

This resulted in a premium loss of $1.7 million.

Mireles then allegedly created another farm labor contracting company, Calzona Ag Management, Inc., recruiting Mena in the process.

Together, they allegedly shifted payroll to this new company to avoid scrutiny of the business’ workplace safety, which would have more than doubled the insurance premium.

They also allegedly underreported $8.8 million in employee payroll from December 2019 through December 2021, resulting in an additional premium loss of $1.8 million.

The task force investigation reportedly also found that Mireles underreported $12.8 million in employee payroll to the Employment Development Department and failed to report personal income to the Franchise Tax Board, resulting in a combined loss of approximately $3 million for unpaid tax liability, penalties, and interest.

The alleged scheme defrauded their insurance carriers, EDD, and FTB out of over $6.5 million. Investigators have also accused Mireles of fraudulently obtaining a COVID-19 Paycheck Protection Program loan.

Mireles ultimately pleaded guilty and was sentenced to one year in prison.

He faces additional felony charges for his role in an earlier workers’ compensation insurance fraud scheme uncovered by the task force, the Department of Insurance said.

Mireles has been charged with eight felony counts, including workers’ compensation insurance fraud, grand theft, unemployment insurance fraud, and tax fraud.

Mena has reportedly been charged with three felony counts of workers’ compensation insurance fraud and one felony count of grand theft.

Insurance Commissioner Ricardo Lara commented, “When business owners illegally underreport payroll, they are hurting legitimate businesses and California consumers who pay the price through higher insurance premiums.”

“Exposing fraud is critical to protect workers and businesses. Thanks to the work of my Department detectives and the Central Valley Workers’ Compensation Fraud Task Force these business owners are being held accountable for their actions.”

Kings County Business Owners Arraigned for Alleged $30 Million Workers’ Compensation Fraud was last modified: June 17th, 2024 by admin
Categories: Kings

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