Monterey, CA – Monterey County District Attorney Dean D. Flippo recently announced that Anthony Vincent Perez, age 35, of Salinas, pled to one count of making a material misrepresentation in order to obtain a lower workers’ compensation insurance premium in violation of Insurance Code section 11880, one count of willfully failing to file payroll tax returns with intent to evade tax in violation of Unemployment Insurance Code section 2117.5, and one count of violating the private patrol operator provisions in violation of Business & Professions Code section 7582.3(b). The defendant owns ESA International, a private patrol operator that provides private security for businesses. Sentencing is scheduled for April 15, 2014 in front of the Honorable Larry E. Hayes.
In December, 2012, an anonymous tip was received by the Monterey County District Attorney’s Office, Workers’ Compensation Fraud Unit indicating that the defendant was paying his employees in cash and was operating without workers’ compensation insurance. An investigation revealed that the defendant was illegally classifying his guards/employees as independent contractors. The Bureau of Security and Investigative Services (BSIS) and Private Patrol Operator (PPO) provisions require all guards to have a “guard card” but they must work under a PPO licensee as employees. It was also discovered in the investigation that the defendant had been in business since 2006 and had not registered with the Employment Development Department (EDD) nor reported any employee wages. In 2013, while the case was being investigated, the defendant obtained workers’ compensation insurance through the State Compensation Insurance Fund (SCIF) making material misrepresentations in order to obtain a lower premium.
The case was investigated by District Attorney Investigator Martin Sanchez, CDI Detective Stuart Rind and BSIS Investigator Laura Jestes.
Making a material misrepresentation in order to obtain a lower workers’ compensation insurance premium in violation of Insurance Code section 11880 has a maximum penalty of five years and a fine of up to double the amount of the fraud. Failing to file payroll tax returns with intent to evade tax in violation of Unemployment Insurance Code section 2117.5 has a maximum penalty of three years and up to a $20,000 fine. The PPO violation is a misdemeanor. Employers are required to register their businesses, report and pay taxes to EDD for all employees. Additionally, business owners and the public need to be aware that California law requires all employers to secure workers’ compensation insurance for their employees so that there is adequate medical coverage and other benefits for employees for any work related injuries that may occur.
Source: Monterey County DA’s Office