California Insurance Commissioner Steve Poizner announced that two Southern California men have been charged with conspiring to defraud the State Compensation Insurance Fund (State Fund) of more than $18 million.David Zahler, 52, of Huntington Beach, and David Tai, 66, of Hacienda Heights, surrendered to police on Nov. 26, following a two and a half year CDI investigation.
Zahler and Tai allegedly conspired to defraud the State Fund of over $18 million in insurance premiums they owed for the worker's compensation policy issued to Staffing Services Inc., a temporary employment company with thousands of employees.
It is alleged that the men purposely misrepresented the types of employees for which they obtained workers' comp coverage, in order to pay $18 million less in premium payments. Zahler was the CEO and Tai the chief financial officer for Staffing Services. Staffing Services headquarters is located in the City of Bellflower.
CDI launched an investigation into Staffing Services after State Fund notified the California Department of Insurance of this suspected fraud. The investigation revealed that Zahler and Tai were allegedly providing false information to the State Compensation Insurance Fund to fraudulently obtain workers' comp insurance coverage for $18 million less than should have been due for their insurance coverage.
Zahler and Tai each face up to 20 years in prison and up to $40 million in fines if they are convicted of these crimes.
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1 comment:
Interesting story. You are probably also aware that about 25% of all fraud cases that involve equipment leasing/financing in the US come not just from California, but from one county in SoCal, Orange County. Many of those fraud cases have an ins fraud component as well.
Stu, Equipment and Tech Leasing
Stu@southernlendingsolutions.com
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