View this article online: https://www.insurancejournal.com/news/west/2020/12/02/592504.htm
Judy Hein, 71, of Oxnard, Calif., was arraigned on five felony counts of insurance fraud after allegedly underreporting payroll for her Simi Valley roofing business by over $4 million, resulting in more than a $2 million loss to the State Compensation Insurance Fund.
The California Department of Insurance received a referral from State Fund On Dec. 19, 2018, alleging that Hein’s business, Cal Roofing Inc., was underreporting payroll to receive a reduced rate for its workers’ comp insurance.
An investigation reportedly discovered internet searches that indicated the number of roofing projects and business revenue was not in line with Cal Roofing’s stated number of employees or estimated annual premium. When wage information from the Employment Development Department for Cal Roofing was compared to wage information in corresponding State Fund policy audits large discrepancies were revealed.
The investigation determined Hein was responsible for filing the fraudulent payroll reports with State Fund. She also signed EDD documents, which revealed the underreported payroll to State Fund, which she correctly reported to EDD.
The audit findings and payroll reports filed with State Fund show a payroll of $831,788 from 2013 through 2018. The payroll reports filed with EDD and bank records allegedly show a payroll of $4,948,114 for the same policy periods. Hein allegedly underreported Cal Roofing’s payroll by $4,116,326 in order to obtain workers’ comp at a reduced rate. The suspected fraud resulted in an estimated loss of $2,171,330 to State Fund in the form of unpaid insurance premiums.
Hein was arraigned on Nov. 17, at the Ventura Superior Court. The case is being prosecuted by the Ventura County District Attorney’s Office.