Three suspects in connection with a workers’ compensation premium fraud investigation conducted by the California Department of Insurance (CDI), Fraud Division have been arrested.
A felony complaint was issued by the Los Angeles County District Attorney’s Office charging Gad Leshem, 59, with four counts of premium fraud and one count of conspiracy. A felony complaint was also filed against Zeev Golan, 54, and Irit Golan, 52, charging both with four counts each of premium fraud and one count of conspiracy. Bail for each of the defendants has been set at $6.5 million dollars. If convicted, each of the defendants could be sentenced to a $50,000 fine or double the amount of the fraud and up to five years in state prison.
Gad Leshem is the president/CEO of Cover-All Inc., a flooring and carpet installation company headquartered in Chatsworth, Calif. Zeev Golan is the vice president and his wife, Irit Golan is employed as the executive secretary and payroll supervisor.
According to CDI, Cover-All obtained a workers’ compensation policy State Compensation Insurance Fund (SCIF) on Sept. 1, 2001. SCIF conducts routine audits of policy holders as part of its normal procedures. The audits revealed that the payroll reported to SCIF was significantly lower than that reported to the Employment Development Department (EDD). As a result, SCIF referred the case to the CDI Fraud Division.
During the course of the investigation, it was learned that Zeev and Irit Golan were responsible for preparing the alleged fraudulent monthly payroll reports provided to SCIF. The monthly payroll reports were reviewed and approved by President Gad Leshem. Leshem and Zeev Golan also provided the alleged fraudulent payroll documents that were provided to SCIF during the routine audits. The investigation conducted by the CDI, Fraud Division determined that from Sept. 1, 2001 to April 16, 2005, Cover-All. underreported payroll of $26,937,575 to SCIF. This underreported payroll resulted in a premium loss of $7,565,009, CDI said. SCIF also assisted in the investigation.
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