L.A. Business Owner Sentenced for Comp Fraud

December 6, 2004

A Los Angeles business owner was sentenced to pay $1.8 million in restitution and fines this week after a three-year joint investigation involving the California Department of Insurance found he had underreported wages at his picture framing operation by some $7 million.

Randy Greenberg, 46, of Los Angeles, was sentenced in Los Angeles County Superior Court on Nov. 29 to a two year suspended state prison term, and placed on five years probation on four felony counts of workers’ compensation fraud and one felony count of fraud and embezzlement.

The case was prosecuted by the Los Angeles County District Attorney’s Office Workers’ Compensation Insurance Fraud Division, working jointly with the California Department of Insurance. The Department received assistance from the State Compensation Insurance Fund (SCIF) and American International Group (AIG), Internal Audit Support Group.

CDI investigators reportedly discovered that Greenberg and his picture framing business, KBST Inc. were defrauding State Compensation Insurance Fund and AIG from 1998 to 2001. Greenberg’s schemes used shell corporations, fraudulent workers’ comp applications, underreporting of payroll and manipulation of employee job classifications codes to hide some $7 million in wages.

Greenberg was ordered to pay $677,693 in restitution to SCIF, $276,413 to AIG, and $863,000 to the Workers’ Compensation Fraud Assessment Commission for the cost of the investigation.

Topics Fraud Workers' Compensation AIG

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Latest Comments

  • December 22, 2004 at 12:06 pm
    linda hall says:
    Randy & Crystal already manufactures in Mexico & China. No one needs to run him out of town - he went their long ago - maybe to avoid paying people, insurance and other things... read more
  • December 17, 2004 at 10:28 am
    Ken K says:
    TODD HIT THE PROBLEM RIGHT ON THE HEAD. MR. GREENBERG THRU HIS BRILLIANCE AND BUSINESS TALENTS HAS BEEN RESPONSIBLE FOR MANY EMPLOYEES BEING ABLE TO EARN A LIVING AND SUPPORT ... read more
  • December 17, 2004 at 9:50 am
    Todd says:
    Is it any wonder why companys are leaving the U.S.for Mexico and Asia.Excessive prosicution along with excessive fines and penaltys are just some of the reasons and this is a ... read more

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