CEOs of California Sewing Firms Sentenced for Workers’ Comp Fraud

March 17, 2017

Sisters who are CEOs of sewing companies that are subcontracted by True Religion jeans have been sentenced for conspiring with their accountant to hide tens of millions in payroll to avoid paying for workers’ compensation insurance.

Sung Hyun Kim and Caroline Choi, CEOs of Meriko Inc. and SF Apparel Inc., were sentenced on March 14 in a court in Los Angeles.

Sung Hyun Kim, who pleaded no contest in December to workers’ compensation fraud, was sentenced to two years of either jail or electronic monitoring and two years of probation.

Choi was sentenced to one year of jail or electronic monitoring and five years of probation for failing to pay payroll taxes.

The accountant, Jae Kim, who was also charged in the plot, received the same sentence as Choi.

Restitution of $4.6 million has already been paid in the case.

The California Department of Insurance said in April 2015 that the trio allegedly conspired to underreport $78.5 million in payroll to multiple insurers including the State Compensation Insurance Fund and two insurance companies owned by Berkshire Hathaway.

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