Over the last year, multiple agencies here in the state of California -- including the Department of Industrial Relations, the Workers' Compensation Insurance Fraud Unit and District Attorneys in several counties -- have joined forces as part of a concerted effort to crack down on the "underground economy," meaning both uninsured employers, and those employers who abuse state employment and work comp laws.
In fact, the San Bernardino County District Attorney's Office recently announced that it had worked alongside some of the aforementioned agencies to build a case against 42-year-old Bhagwant S. of Oak Hills, charging him with multiple counts of insurance fraud and tax evasion.
According to the complaint, Bhagwant S. -- the owner and operator of A&J Shippers, Inc. and Los Angeles Express Trucking Companies located in Hesperia -- allegedly engaged in a systematic pattern of fraudulent activity during the course of a ten-month investigation.
Specifically, prosecutors are accusing him of failing to maintain the necessary level of work comp coverage for his employees and failing to pay employee payroll taxes as otherwise mandated by state law.
Bhagwant S. was officially charged with four felony counts of tax evasion, four misdemeanor counts of doing business as an uninsured employer, three misdemeanor counts of failure to observe a stop order and one misdemeanor count of resisting arrest. He faces up to 6 years in state prison, payment of restitution and $20,000 in fines if convicted.
The head attorney for the Work Comp Fraud Unit, David Simon, vowed to continue efforts to eliminate the underground economy in California.
"This not only creates an unsafe environment for employees, but also makes it more difficult for legitimate and licensed businesses to compete," he said.
Remember if you are an uninsured California employer facing a real problem -- prospective fine, prosecution, an employee injury or litigation -- there may be steps that can be taken to minimize the consequences. In these difficult circumstances, you may want to consider consulting with an experienced legal professional.
This post was provided for informational purposes only and is not to be construed as legal advice.
Stay tuned for further developments in the area of workers' compensation defense law ...
San Bernardino County District Attorney, "Oak Hills business owner arrested and charged with resisting arrest, tax evasion and workers' comp violations," April 1, 2013