Multiple fraud acts under one roof

Following a four and a half-year investigation and prosecution by CDI, the Employment Development Department (EDD) and the San Mateo County District Attorney’s Office, Laurence Bennett Guy was sentenced in Superior Court, County of San Mateo on five felony counts of insurance fraud, tax fraud and money laundering.

Guy, owner of Guy’s Roofing in Redwood City, received one year in county jail, was placed on five years of supervised probation and ordered to pay $800,000 in restitution to several insurance agencies, CDI and the EDD. CDI reported that Guy had paid at least $100,000 in restitution.

Guy allegedly developed a scheme in which he paid his workers in cash for all overtime hours and some straight time, thereby underreporting his payroll taxes and reducing his workers’ comp premiums. This allowed Guy’s Roofing to underbid competing roofers in the Bay Area.

According to investigators, a payroll document was uncovered detailing the scheme when a search warrant was served on Guy’s Roofing in July 1997. A check was issued to an employee of Guy’s Roofing, whom Guy alleged was a sub-contractor. The employee was then given a check with a list of what denominations of bills would be needed to pay the workers in cash.

The check was always reportedly kept under $10,000 to keep the bank from reporting the transaction to federal authorities. Once cashed, the money was brought back to Guy’s Roofing to be placed in envelopes for each employee and attached to their paycheck. The payroll document also directed the bookkeeper to shred all evidence of cash payments after the cash was distributed.

It is further alleged that Guy had employees create fictitious identifications with green cards and social security cards, allowing employees to cash checks under assumed names. Employees were also ordered to create false certificates of workers’ comp coverage to be shown to carriers and tax auditors.

Topics Fraud