Two Southern California men who were arrested on Oct. 15 for workers’ compensation insurance fraud in Orange County.
The state Insurance Commissioner, Steve Poizner, said that Sanjiv Mahendra Shah, 53, of Placentia and Abu M. Hossain, 59, of Chino Hills have pled guilty to 13 counts of fraud and one count of conspiracy in a workers’ compensation insurance fraud case that began in 2005.
As part of the plea agreement, Shah and Hossain have agreed to pay $380,126 in restitution to the State Compensation Insurance Fund and Fireman’s Fund. Each will serve 120 days in jail, serve three years probation and pay an undetermined amount of fines. Sentencing is Jan. 26, 2010.
Shah owns Sonic Foods and United Pizza. Hossain was Shah’s bookkeeper. From 2005 to 2008 it was alleged that Shah, with Hossain’s help, underreported employee payroll by $6.71 million to lower his workers’ compensation insurance premiums to the State Compensation Insurance Fund and later the Fireman’s Fund. Combined, the premium losses to State Fund and Fireman’s Fund over the three-year period totaled $375,553.
The fraudulent activity was discovered by State Fund in May 2006 and forwarded to the California Department of Insurance and Orange County District Attorney’s Office for investigation.
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