Ryan Black, 45, formerly of Fair Oaks, Calif., and Curtis Davis, 53, of Penryn, were both charged this week with three felony counts of workers’ compensation fraud after allegedly underreporting payroll and employees by more than $30 million to save on workers’ compensation insurance premiums.
The underreporting resulted in an approximate loss of $3.8 million to three insurance companies, according to the California Department of Insurance.
Black and Davis were owners of Apex Industry Solutions Inc., a flooring installation company in Sacramento. In October 2017, Apex’s insurance carrier at the time reportedly discovered that two individuals working for Apex were performing floor installations without a license and were receiving 1099 forms as independent contractors instead of W-2 forms as employees. However, Black identified the two workers, along with two additional workers, as employees of Apex.
The CDI launched an investigation after receiving a report of suspected fraud from Apex’s insurance carrier in April 2018. The investigation reportedly revealed Black had a large number of flooring installation employees, and had reported minimal to no flooring installation payroll to the carrier.
The investigation also found Black and Davis conspired to underreport payroll to two additional insurance companies who had been their previous carriers. Over the span of five years, from 2013 through 2018, the underreported payroll totaled roughly $30 million, which resulted in an approximate loss of $3.8 million to three insurance companies.
Black, who now resides in Cleveland, Tenn., was arraigned on Wednesday, and Davis was arraigned on May 5. The case is being prosecuted by the Sacramento County District Attorney’s Office.
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