Sacramento, CA – Trucking company owners Hardip Singh and Amandeep Kaur were recently charged with multiple counts of insurance fraud after allegedly misclassifying employees as independent contractors in a scheme to underreport payroll by more than $1.4 million, resulting in a $234,000 loss to their insurer and a $220,000 loss to the Employment Development Department (EDD).
“By underreporting payroll and employees, not only are business owners breaking the law they are putting honest businesses at risk,” said Insurance Commissioner Ricardo Lara. “We investigate cases like this to protect legitimate businesses and California consumers who pay the price for this type of fraud through higher insurance premiums and increased costs.”
Singh and Kaur were doing business as Trust Transport, Inc., a long-haul trucking company based out of their residence in Sacramento and a separate trucking yard in West Sacramento. From February 25, 2014 through October 20, 2016, Trust Transport maintained workers’ compensation insurance coverage with State Compensation Insurance Fund (SCIF) and reported $105,811 in payroll.
SCIF conducted audits to confirm the payroll and found that several workers were issued 1099s and had been misclassified as independent contractors. Department of Insurance detectives served a search warrant at Trust Transport’s bank for financial records and discovered approximately $1,436,387 in unreported payroll from the misclassified “independent contractors.” The investigation revealed Singh and Kaur fraudulently misclassified these employees in order to avoid paying higher workers’ compensation insurance premiums. SCIF reported a $234,541 loss in underpaid insurance premiums and EDD reported a $220,000 loss due to this scheme.
Both Singh (October 13) and Kaur (October 16) self-surrendered to the Sacramento County Superior Court. The Sacramento County District Attorney’s Office is prosecuting the case.