California Employer Arrested for Wrongly Accusing Employee of Workers Comp Fraud

A San Bernardino, Calif., employer has been arrested for wrongly accusing an employee of workers compensation fraud, according to the California Department of Insurance. Matthew Day, 26, was arrested after surrendering himself to the County of San Bernardino Superior Court on March 28. He has posted bail, and a preliminary hearing has been scheduled for April 10, 2006. If convicted, Day could serve five years in state prison and pay a fine of $150,000, or double the value of the fraud, the Insurance Commissioner’s office said.

According to investigators, on July 1, 2005, Day, the owner of Western Tree Service, reported to investigators at the Department of Insurance regional office in Rancho Cucamonga, Calif., that employee Carlos Jaramillo, 36, was making a false workers’ compensation claim against his company. Day told investigators he accepted a job application from Jaramillo but never hired him. Jaramillo’s injury on Feb. 22, 2005, occurred at the San Bernardino County International Airport, where Day was working as a sub-contractor. The investigation revealed that Day did in fact hire Jaramillo prior to Jaramillo’s injury date, according to CDI.

The investigation also showed that Day reported the injury to the contractor — San Bernardino County International Airport – but Day did not have workers’ compensation insurance at the time of Jaramillo’s injury. As a result, the Uninsured Employers Fund of the Department of Industrial Relations’ Division of Workers’ Compensation was used to pay for benefits resulting from the workers’ compensation claim; they also attempted to get the money paid out on the claim from the uninsured employer.

“This employer put his unsuspecting employee in an immensely risky situation,” said Insurance Commissioner John Garamendi. “Mr. Day allegedly lied to the Department stating that his employee was making a false workers’ compensation claim. In fact, Day was just attempting to conceal the fact that his company did not have workers’ comp coverage. This attempted cover up made his client and employee vulnerable to huge potential losses.”

In making a false statement that Jaramillo was not an employee at the time of injury, Day was preventing Jaramillo from obtaining medical treatment, potential temporary disability and permanent disability benefits as well as any other benefits entitled to injured workers’ in the State of California, CDI said.

Topics California Fraud Commercial Lines Workers' Compensation Business Insurance