Alfredo Casas, 62, of Stockton, Calif., has been arraigned on 15 felony counts of insurance fraud, grand theft and tax evasion.
Casas allegedly underreported payroll for his farm labor contracting business by over $1 million, resulting in a substantial loss to two insurance companies and the State Compensation Insurance Fund (State Fund).
"Businesses and California consumers pay the price when some business owners cheat the system by illegally underreporting employees and wages," said Insurance Commissioner Ricardo Lara. "We all pay for this type of fraud through higher premiums and costs of services. My Department is committed to investigating fraud to protect consumers and businesses."
Casas was convicted on similar workers’ compensation fraud charges in 2012. As part of that conviction, Casas’ business was found uninsurable by State Fund. However, Casas allegedly renamed and restructured his business using family members to serve as its officers, allowing him to obtain new workers’ compensation insurance policies.
On March 6, 2019, the Department of Insurance received a referral from an insurance company alleging Casas’ business, AC Farm Ag Inc., was reporting no payroll in order to receive a reduced rate for workers’ compensation insurance. By reporting no payroll throughout the calendar year, Casas paid a lower premium rate than he was entitled to receive.
A joint investigation and search warrant service conducted by the Department of Insurance and San Joaquin County District Attorney’s Office discovered Casas failed to disclose payroll, previous insurance claims, and policy cancellations and failed to provide correct job descriptions for his employees.
Casas also operated for over two years as Casas Farm Services using forged Certificates of Insurance, forged Department of Industrial Relations Farm Labor Contractor permits, forged San Joaquin County Agriculture permits and documents he obtained from the state’s Labor and Workforce Development Agency by fraud.
Under state law, employers are required to maintain workers’ compensation insurance to protect their employees in the event of an accidental on-the-job injury. To ensure proper coverage, employers must accurately report the number of employees, job classifications, and the amount of payroll expended.
One of the common ways in which employers avoid paying insurance premiums is to underreport a business’s payroll by providing false payroll reports to their insurance company.
Casas is scheduled to return to court on February 10, 2022, for further arraignment. This case is being prosecuted by the San Joaquin County District Attorney’s Office.