Paul Payne, a business owner, has been slammed a one-year imprisonment sentence and placed on six-year probation for falsely declaring the number of employees he had.
The business owner based in Simi Valley, California, was ordered to pay a further $1,058,058 in restitution to the California Compensation Insurance Fund for workers compensation fraud.
Payne has already paid $25,000 in restitution with the rest to come in monthly installments.
The business, Paul Payne Roofing had engaged employees for roofing and painting jobs.
However, between 2012-2016, Payne had forwarded payroll reports to the California state insurance fund which falsely showed that he had no employees.
The misrepresentation enabled Payne to pay only a portion of the workers’ compensation premiums.
The prosecutor in the fraud case, The Ventura County District Attorney’s office, pointed out that the fraud committed affected persons.
“It harms businesses that pay for workers’ comp insurance because their costs are higher than uninsured and under-insured businesses.
“Uninsured and under-insured businesses also put their employees at risk because they may not be able to provide proper medical treatment or wage replacement if a worker is seriously injured on the job,” the office noted.
In 2016, one of Payne’s employees reported a traumatic injury, alerting the defendants’ workers’ comp insurer to the fact that the defendant was operating his business without reporting his payroll.
This contravenes a California law passed in 2013 which seeks to check fraud in the state’s workers’ compensation system.