MARTINEZ (CBS SF) -- The owner of a Point Richmond construction company pleaded no contest this week to six counts of felony workers' compensation and payroll tax fraud, according to the Contra Costa County District Attorney's Office.
Maurosan Milhomem, owner of Viking Pavers Inc., pleaded no contest to the six fraud charges Monday following a joint investigation by the district attorney's office, the California Department of Insurance's Fraud Division and the state Employment Development Department's Criminal Investigation Division.
The Contractors State License Board and the state Department of Industrial Relations had cited Viking Pavers in 2017 for working with an unlicensed subcontractor named FF Services, which also lacked workers' compensation insurance.
The Contra Costa County District Attorney's Office then learned of the fraud following a vehicle crash involving Viking Pavers employees. The company failed to name the employees during insurance premium audits, which monitor whether employers are properly classifying their employees and subcontractors.
Investigators with the district attorney's office found that Viking Pavers continued to use FF Services as an unlicensed contractor through 2018, even after the state citations.
Viking Pavers' payments to FF Services and other unlicensed and uninsured subcontractors were re-routed through a check cashing service in Richmond as well as the bank accounts of a shell company to avoid auditors detecting the payments in the company's financial records.
Investigators executed a search warrant of the company and seized more than $80,000 in cash, according to the district attorney's office.
"We need to ensure employers follow state law and protect their employees," District Attorney Diana Becton said. "The defendant explicitly ran fraudulent schemes to avoid paying taxes and ultimately jeopardizing the health and safety of his workers."
Milhomem was sentenced to 364 days in county jail, but will be eligible to serve the sentence via electronic home detention.
Contra Costa County Superior Court Judge Laurel Brady, who accepted Milhomem's plea, also ordered him to serve five years of formal probation and pay more than $2.2 million combined in underpaid workers' compensation premiums and tax liabilities to the Markel Corporation, the EDD and Berkshire Hathaway.
Insurance fraud is punishable by up to five years in state prison and a fine of up to double the fraudulent amount, according to the district attorney's office.
People with information about possible insurance fraud are encouraged to report it to the district attorney's office at DA-ReportFraud@contracostada.org.
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