Four Suspects Arrested for Alleged $39 Million Workers' Comp Premium Fraud

October 19, 2006

Four suspects who allegedly committed more than $39,280,000 worth of workers' compensation premium fraud against three insurance companies have been arrested in California.

After a nearly four-year investigation conducted by the Department of Insurance's (CDI) Fraud Division, investigators served arrest warrants on Tuesday against Luis Perez, 37, of Dove Canyon; Paul Rodas, 40, of Costa Mesa; Elizabeth Waldo (aka: Elizabeth Middleton), 58, and Oscar Hidalgo, 31, both of Yorba Linda. An arrest warrant is still outstanding for Javier Chavolla, 36, also of Yorba Linda. All of the suspects were either owners or principal employees of temporary employment agencies known as Checkmate Staffing Inc.; Checkmate Staffing West Inc.; Checkmate Staffing West Inc.; Checkmate Transport Inc; Tower Temps, Inc.; Staffaide Inc.; RPM Staff Leasing; and Tower Staffing Inc.

Perez and Rodas were arrested at their current place of employment in Foothill Ranch. Waldo was arrested at her residence by the Chino Hills Police Department, and Hidalgo was arrested at his place of employment in Orange.

Each of the four suspects has been charged with one count of conspiracy to commit workers' compensation insurance fraud and one count of conspiracy to commit denial of workers' compensation insurance benefits. If convicted, they could face up to 10 years in prison. Perez was booked into Orange County jail with bail set at $10 million. Waldo was booked into West Valley Detention Center Jail on $500,000 bail. Hidalgo was booked into Orange County jail on $500,000 bail, and Rodas was booked into Orange County jail on $250,000 bail.

The suspects were all owners or employees who are alleged to have fraudulently underreported and/or misclassified employees to several insurance companies, including State Compensation Insurance Fund, Zurich American Insurance Co., and Redland Insurance Co. The suspects' companies were neither licensed insurers nor were they bonded and able to act as a third party administrator, according to CDI.

The San Bernardino County District Attorney's office is prosecuting this case, and additional arrests are expected.

If anyone has information regarding Chavolla or other aspects of this case, contact the CDI Fraud Division's regional office in Rancho Cucamonga at 909-919-2200, or a local law enforcement agency.

Source: CDI