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CA Department of Insurance

Insurance Commissioner Jones Announces Conviction Of Los Gatos Business Owner For Insurance Fraud And Perjury

News: 2011 Press Release

For Release: February 23, 2011
Media Calls Only: 916-492-3566
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Insurance Commissioner Jones Announces Conviction Of Los Gatos Business Owner For Insurance Fraud And Perjury
Case involves $1.6 Million penalty for failure to pay premiums and failure to accurately report payroll

Insurance Commissioner Dave Jones today announced that Ronald J. Haas Sr., 69, has been convicted on 10 counts of Insurance fraud for failing to accurately report payroll to his workers' compensation insurance carriers and the Employment Development Department (EDD) and for failing to pay insurance premiums to the State Compensation Insurance Fund (SCIF), and First Comp. Haas was sentenced to one year in the county jail and restitution to the entities involved, and three years probation.

"Workers' compensation insurance premium fraud is an egregious offense and it will be fully investigated by my Department," said Commissioner Dave Jones. "Those who would seek to cheat a fund to help workers who were legitimately injured will be prosecuted to the fullest extent of the law."

On January 12, 2007, State Compensation Insurance Fund Special (SCIF) submitted a Suspected Fraudulent Claim Referral Form (FD-1) to the California Department of Insurance, Fraud Division, for investigation of suspected workers' compensation insurance premium fraud. The referral alleged that Haas, President of R J Haas Construction Corporation, et al., Saratoga, CA, failed to accurately report employee payroll to his workers' compensation insurance carrier, SCIF. From July 1, 1998 to June 1, 2005, Haas claimed that he had no employees and that sub-contractors did all the work for his company. However, during this period, four workers' compensation claims were filed by injured employees. Haas reported payroll to SCIF only after an injury was discovered and then payroll reporting stopped shortly thereafter, with the cancellation of his SCIF policy. Subsequently, Haas obtained workers compensation insurance policies through First Comp and again reported minimal to no employees.

An investigation by the Silicon Valley Regional Office of the California Department of Insurance, Fraud Division and the California Employment Development Department (EDD) revealed that Haas misrepresented office staff, project superintendents, foremen, and even some of his own family members as subcontractors. A forensic audit was conducted and revealed that Haas owed $594,293.22 in insurance premiums to SCIF, $229,167.71 in insurance premiums to First Comp and $813,328.27 to EDD for failing to accurately report employee payroll for the purpose of determining employment tax liabilities.

On April 29, 2009, Haas was arrested for felony violations of Insurance Code. Haas is eligible to apply for a home electronic monitoring program in lieu of county jail time. At time of sentencing Haas had already paid the full amount of restitution owed to insurance carriers SCIF and First Comp and to EDD.

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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