California Contractors Praise Charges Against Pool Company

February 5, 2013
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An announcement at the beggining of the month by the Riverside County District Attorney’s Office that it’s bringing criminal charges that include multiple counts of workers’ compensation fraud against a Southern California pool contractor has drawn praise from several groups who represent construction contractors.

Michael Gregory Silverberg, general manager and owner of Palm Desert, Calif.-based United States Pools Corp., was charged with defrauding California State Compensation Insurance Fund, the State Board of Equalization and two insurance companies and committing white-collar crimes. The fraudulent actions resulted in a loss of about $566,950 to various agencies between 2007 and 2012, according to investigators, which included the Inland Empire Premium Fraud Task Force.

Silverberg was arrested on Jan. 21 and pleaded not guilty on Jan. 25. He allegedly reported his pool cleaning employees as independent contractors to reduce his workers’ comp premiums. He also allegedly failed to report new pool construction employees on his workers’ comp policy.

Among the counts he faces are falsifying statements to reduce his worker’s compensation insurance rates, and failing to collect taxes. If convicted, Silverberg faces up to 16 years in prison. He is due back in court on Feb. 26.

Brad Diede, executive director of the California Professional Association of Specialty Contractors (CALPASC), called for more such enforcement.

“We count on state and local agencies to continue their collective efforts by focusing on the serial violators, including those who hire them,” Diede said.

Mike Geremia, president of Geremia Pools Inc., and chairman of theboard of the California Spa and Pool Education Council, said the charges are the “tip of the iceberg” when it comes to corrupt contractors.

“This is a great step in the right direction by the district attorney’s office and other state agencies to coordinate efforts,” Geremia said in a statement. “We expect this is just the tip of the iceberg and hope the district attorney and state enforcement agencies will continue cracking down on corrupt contractors who compete unfairly.”

John Norwood, president and general counsel for SPEC, who is also a well-known insurance lobbyist, said corrupt contractors are hurting legitimate operations.

“Contractors like this have been getting away with dodging the law for a long time while forcing legitimate contractors to go out of business,” Norwood said.

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