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CALPASC Praises CDI's Work in Arresting Owners on Workers' Compensation Fraud

Wednesday, June 27, 2012   (0 Comments)
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CALPASC Praises CDI's Work in Arresting Owners on Workers' Compensation Fraud

Contractors Disgusted by Business Owners’ Deceit and Gratified to See Them Brought to Justice

SACRAMENTO, Calif.June 27, 2012 /PRNewswire/ -- California contractors were sickened by the news in the recent California Department of Insurance (CDI) announcement on the arrest of the unscrupulous owners of A & F Engineering who allegedly committed insurance fraud and denied insurance benefits to an employee's family. As announced by Commissioner Dave Jones, A & F Engineering's employee, Jose Villanueva, was killed in a work-related accident. As a consequence of owners Allan and Carolina Pacheco's failure to pay less than $12,000 in workers' compensation insurance premiums, Villanueva's wife and three children will receive no death benefits, which would have been "approximately $650,000 plus burial benefits." If convicted of the charges, the owners face time in state prison and as much as $710,000 in fines and reparation.

"We appreciate CDI's efforts in catching swindlers like these business owners. It is truly unfortunate that a family has to suffer this way and be denied what is rightfully theirs," said Northern California Electrical Construction Industry Labor Management Cooperative Trust Executive Director Andre Gardner. "Too often, legitimate trade contractors lose work to corrupt contractors who underbid jobs and cheat their workers, making it difficult to compete on a fair and level playing field."

"Unfortunately, there are too many stories like this, and yet there are legitimate contractors up and down the state who strive to operate both lawfully and fairly while providing safe environments for their employees," commented California Professional Association of Specialty Contractors (CALPASC) Executive Director Brad Diede. "We fully support the coordinated work of our state agencies in sounding the alarm that crime doesn't pay. In this instance, for example, the owners may face jail time and end up paying hundreds of thousands of dollars in fines and restitution, far exceeding the $12,000 they failed to pay for workers' compensation insurance."

According to the CDI release, an investigation uncovered lies by Allan Pacheco about the actual work conducted by his employees as a means to "obtain a workers' compensation policy at a cheaper rate." As a consequence of the falsification of the facts, the workers' compensation policy was retracted and no benefits were available to Villanueva's family.

"The conduct of contractors like those reported in the CDI release is unconscionable," said John Norwood, President and CEO of the California Spa & Pool Industry Education Council. "We must continue the work of catching unethical contractors and highlighting their transgressions and the applied consequences to send the message that criminals will be caught and pay the price of their actions." 

Diede emphasized, "Fed up with the covert actions of deceitful contractors, lawful contractors established the LEVEL Program (Lasting Effective Violator Enforcement Leadership) to encourage coordinated state and local efforts in leveling the playing field for honest contractors to compete effectively."

The California Professional Association of Specialty Contractors is a nonprofit 501(c)6 trade association advocating on behalf of trade contractors and suppliers of building materials in California. CALPASC is committed to educating members on complex issues and advancing safety and compliance within the building industry.


SOURCE California Professional Association of Specialty Contractors (CALPASC)

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