Some prosecutors say insurance companies are common targets for fraud because they handle large amounts of cash. A recent indictment of three people from the Sacramento area offers support for this theory.

The allegations of the indictment

The three defendants, a man aged 49 from Angels Camp, a woman aged 68 from Somerset, and a male aged 63 from Rocklin, are alleged to have conspired to fraudulently reduce their payrolls in order to reduce the cost of their workers’ compensation permits and thereby defraud the state’s compensation insurance fund of more than $127,000. The investigation was conducted by the state insurance department and the El Dorado County District Attorney’s Office.

The company, Archer Building Company, reported workers’ compensation-related claims through the end of 2016. Prior to the end of 2016, the company received a notice that its compensation claims had risen and that the premium for workers’ compensation insurance in 2017 would increase. An employee of Archer then created a subsidiary that was used to pay the firm’s carpenters and thereby avoid paying carpenters that were, in reality, working for Archer. The female defendant was described by authorities as the bookkeeper and point of contact for insurance audits for both Archer and the subsidiary.

The three defendants surrendered to authorities in early March, and they were scheduled to appear in court on May 26, 2022.

The right to a defense

The three defendants appear to have pleaded guilty to the main charges in the arraignment, but details remain, such as the length of incarceration, the amount of any fine that may be levied, and future limitations on their rights to do business in California. Anyone facing similar charges may benefit from consulting an experienced criminal defense attorney for an evaluation of the evidence, potential defense strategies, and, if appropriate, assistance in negotiating an acceptable plea agreement.