Calif. State Fund Receives More Than $3 Million in Fraud Restitution

San Diego Superior Court Judge William H. McAdam has ordered the owners of a San Diego area roofing company to pay $3 million in restitution to California’s State Compensation Insurance Fund, $81,649 in investigation costs and sentenced the company owners to three years of summary probation for workers’ compensation insurance fraud.

Paul Frederick Mayer and David Gordon Archer, owners of Mayer Roofing, originallywere indicted by a grand jury in February of this year. From 2001 to 2003, company officers created a scheme that underpaid workers’ compensation insurance premiums by $3 million. They created false payroll records thus understating the company’s workers’ compensation premium, according to SCIF.

Along with Mayer, 52, and Archer, 62, two other officials of the company were previously sentenced in this case. Laura Elena Caballero, 36, and Judy Kay Toledo, 50, pleaded no contest to a misdemeanor charge of workers’ compensation insurance fraud and were both sentenced to three years summary probation.

The fraud was first uncovered by a routine audit. State Fund investigators informed the San Diego County District Attorney’s Office of their suspicions about the company’s payroll and premium practices. Beginning in Dec. 2004, the San Diego County District Attorney’s Office and the California Department of Insurance served a search warrant at six locations including Mayer Roofing Offices in San Diego, Riverside and Los Angeles Counties. They seized 187 boxes of evidence.

Mayer Roofing was licensed in 1993, and does business throughout Southern California and Fresno. It employs nearly 450 employees and is engaged primarily in new home construction. The company is headquartered in Escondido and has offices in Riverside, San Fernando and Bakersfield.

Source: SCIF