San Jose Suspects Arrested for Workers' Comp Fraud

A plumbing company owner, his employee, and the employee's girlfriend have been arrested and charged with multiple counts of felony workers' compensation insurance for allegedly bilking insurers out of at least $26,000. The business owner, Lyle Edward Eddlemon, 67, of San Jose, was arrested at San Francisco International Airport and then booked into the San Mateo County jail. He was released after posting $40,000 bail.The other two suspects, Joseph Thomas Mijares, 40, and Dawn Hannah Kaiser, 48, both of Copperopolis, Calif., surrendered to authorities after their April 28 arrests and were booked into the Santa Clara County jail. They were also released on $40,000 bail.

The two-year investigation into the case, focusing on a business called "Drain Busters," was conducted by the California Department of Insurance (CDI) Fraud Division, the Santa Clara District Attorney's office, and the California Employment Development Department (EDD).

Authorities alleged that Eddlemon hired Mijares in 2001 despite knowing that Mijares was receiving workers' compensation benefits from a reported injury at another plumbing company. Eddlemon reportedly paid Mijares with checks made out to his girlfriend, Dawn Kaiser, in order to conceal his employment at Drain Busters. Kaiser was never an employee of the company.

Based on evidence seized from Eddlemon's residence during the investigation, authorities stated that he also owes underreported employee wages to the State Compensation Insurance Fund and to Farmers Insurance. Allegedly, he did not report cash he paid to day laborers to either insurance carriers or to the EDD and he owes approximately $263,900 in taxes, penalties and interest, according to investigators.

Hacienda Heights Man Arrested in Alleged $8 Million Auto Theft Scheme

Authorities have arrested a Hacienda Heights, Calif. man who allegedly sold phony auto policies in connection with an $8 million auto theft scheme.

Chika Duru, 46, was arrested April 29 and charged with 16 felony counts for his alleged role in the operation. He is being held in custody in the Orange County Jail on $1 million bail. The Orange County District Attorney's office is prosecuting the case.

CDI investigators worked closely with the California Highway Patrol, the California Department of Motor Vehicles (DMV) and law enforcement in Orange and Los Angeles Counties. Duru's alleged role was pivotal because the fraudulent financial security documents he allegedly provided allowed for the illegal acquisition of the vehicles. If convicted on all counts, Duru faces 13 years in state prison.

According to the investigation, Duru, doing business as Ebb's Insurance, allegedly issued phony insurance policies to help accomplices purchasing automobiles qualify for financing. The purchasers then reportedly drove off the lots with the new vehicles, for which they apparently never intended to pay. These alleged conspirators "sold" the vehicles to an entity named Duty Free Auto Club (DFAC) and discontinued payments to the finance company.

DFAC subsequently reportedly altered the Vehicle Identification Numbers and, with an accomplice DMV employee, obtained counterfeit registration documents indicating DFAC was the original owner, rather than the financing company. DFAC allegedly resold the vehicles from its Costa Mesa lot. DFAC's stable of vehicles included such high-end auto brands as Lexus, Mercedes-Benz and Hummer.