Mary Lou Mott, owner of Zaval-Tex Construction Company, and her office manager, Louise Humberson, are facing felony charges following a Travis County (Texas) grand jury indictment. According to Texas Mutual Insurance Company, Mott and Humberson allegedly committed fraud by filing workers’ compensation claims for employees not covered by their company’s policy.
Texas Mutual fraud investigators allege Mott and Humberson filed claims for employees who worked for another commonly owned company, Zavalla Associates. Zavalla Associates provides labor for Zaval-Tex Construction. By using Zavalla Associates in this manner, Mott and Humberson were able to substantially lower Zaval-Tex’s premium while leaving Texas Mutual liable for any injuries sustained by Zavalla Associates workers.
Mott and Humberson allegedly hid this exposure from Texas Mutual to obtain a lower premium, inconsistent with the amount of risk for that many workers. During two policy years, Mott and Humberson filed 83 claims with Texas Mutual Insurance Company, totaling $1,942,794.