Daniel Francis Elliot, Jr., 52, of San Jose was arraigned on three felony counts of insurance fraud at the Santa Clara County Superior Court. Elliot was charged with providing false or fraudulent information to reduce workers’ compensation premiums with two separate workers’ comp insurance carriers and with willfully failing to pay employment taxes.
According to CDI investigators, Elliot entered a plea of “No Contest” in conjunction with a settlement agreement reached with the Santa Clara County District Attorney’s Office, the CDI, the Employment Development Department (EDD) and the insurance companies involved. As part of the settlement agreement, Elliot agreed to pay $728,000 in restitution to State Compensation Insurance Fund, Clarendon Insurance Company and EDD.
The joint investigation conducted by CDI Fraud Division and EDD uncovered Elliot’s failure to disclose the true salaries of his employees to two workers’ comp companies and the EDD. According to CDI investigators, Elliot concealed his employee’s true salaries by paying only 20 percent of their salaries in the form of a check while the remaining 80 percent was paid in the form of unreported cash.
The investigation also revealed that some of Elliot’s employees desired this arrangement because of judgements and court-ordered child support garnishments against them.
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