Brothers Sam Saeid Afghani, of Agoura Hills, Calif., and Siamac A. Afghani, of Calabasas, Calif., as well as employee Renee Laws, of Encino, Calif., were to be arraigned July14 for their suspected roles in a fraud case at several government construction projects in Ventura and Los Angeles Counties totaling $1.7 million. The arraignment was carried over to August 24, 2004; all three suspects were arrested July 7, 2004.
The three were charged with multiple, felony counts of workers’ compensation insurance fraud and unemployment insurance fraud in addition to other labor code violations, including failure to pay overtime and submitting false payroll records.
All three suspects were booked at the Ventura County jail. Bail was set at $10,000 each. Each suspect faces a maximum penalty of five years in state prison. This case is being prosecuted by the Major Fraud Unit of the Ventura County District Attorney’s Office.
Sam Afghani is the owner of AFCO Construction, and both the owner and president/CEO of AFCO Builders Inc. Siamac Afghani is the secretary of AFCO Builders, and Renee Laws is an employee of AFCO Construction.
“This sort of fraud is not a faceless crime – it steals cash from employees’ pockets and money from taxpayers’ checkbooks,” Insurance Commissioner John Garamendi said. “My department remains vigilant against insurance fraud, and we will continue fighting it with the instrumental help of our public and private sector partners.”
Although the California Department of Insurance, Fraud Division (CDI) is the lead agency, this case was investigated by the Ventura County Underground Economy/Employer Fraud Task Force, which consists of the California Employment Development Department (EDD), the California Department of Industrial Relations’ Division of Labor Standards Enforcement (DLSE), the state Franchise Tax Board (FTB), the Contractors State License Board and the Ventura County District Attorney’s Office.
The loss to State Compensation Insurance Fund, Credit General Insurance Company, Connecticut Indemnity Company and Westport Insurance Corporation is more than $700,000. Taxes and penalties from EDD are more than $540,000, and, according to DLSE, back wages owed to employees are nearly $584,000.
The task force received information from the Carpenters/Contractors Cooperation Committee regarding several government construction projects in Ventura and Los Angeles Counties where AFCO Construction was doing work. A number of employees had alleged that AFCO Construction paid neither prevailing wages nor overtime, and paid some employees in cash. The employees also alleged that the company submitted false certified payroll records on those projects and false payroll information to its workers’ compensation carriers.
Subsequent investigations at five public works projects in Ventura and Los Angeles Counties revealed that prevailing wages and overtime were indeed not paid and that some employees were in fact paid in cash.
Furthermore, some workers reportedly were required to work more than eight hours each day for $50 to $70 per day, and occasionally six days per work week with no overtime paid.
AFCO Construction reported different payroll amounts to FTB, EDD and its insurance carriers. FCO Construction also underreported more than $4.1 million in wages from 1998 to 2002 to its insurance carriers.
Was this article valuable?
Here are more articles you may enjoy.