July 16--SANTA CRUZ -- The owners of the Brookdale Inn and Spa are slated for trial in October on insurance fraud charges, marking another chapter in a tenure that's been fraught with troubles.
In this latest case, Neelam and Sanjiv Kakkar face multiple felony counts of insurance fraud and premium insurance fraud.
The latter charges stem from what prosecutors say was an intentional falsifying of wage information in an effort to obtain lower insurance premiums.
The Department of Insurance investigated alleged discrepancies between wage information the Kakkars supplied to the state Employment Development Department and the information they reported to their insurance company.
Prosecutor Kelly Walker has said the couple was able to obtain lower premiums for their workers' compensation insurance by providing a lower wage number to their insurance company.
Walker alleges the couple paid approximately $800,000 less in insurance premiums than they should have over a period of several years.
In total, Sanjiv Kakkar faces seven felony charges for insurance fraud, insurance premium fraud and claims fraud. His wife is charged with one felony count.
There are also pending misdemeanor charges for violations of health and safety codes pertaining to the disposal of asbestos and for failure to maintain workers' compensation insurance. Those matters will trail the felony trial.
Attorney George Gigarjian appeared in court Monday on the couple's behalf to set a trial date of Oct. 9.
The Kakkars purchased the Brookdale Inn in 2007 for $5.3 million and have run into numerous problems since then, including a 2009 fire that destroyed 20 apartments and displaced 65 people. They've also come under fire by county code officials, who sued the two in civil court for a number of building code violations.
Santa Cruz Superior Court Judge Timothy Volkmann on Friday found the Kakkars to be guilty of contempt of court in that case for failing to come into compliance within the agreed-upon time frame.
The historic inn, built in the 1890s along Highway 9, once hosted such guests as Marilyn Monroe and President Herbert Hoover. It was shuttered in October by Boulder Creek Fire Officials who said the Kakkars had failed to comply with correcting fire code violations within a stipulated time period.
Follow Sentinel reporter Jessica M. Pasko on Twitter @jmpasko96
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