Insurance Commissioner Jones Announces Arrest of Business Owners for Premium Fraud
News: 2011 Press Release
Insurance Commissioner Dave Jones today announced that Valery Alena Thompson, 31, and her husband Earl James Thompson, 47, have been charged with one count each of violating Section 11880(a) of the California Insurance Code. Valery Thompson, President and CEO for Russell/Thompson, Inc. was arrested on May 19, 2011 by authorities in Lakewood, Colorado. Her husband, Earl (EJ) Thompson, Employee and Manager of Russell/Thompson, Inc. surrendered himself to authorities at the Shasta County Jail on May 21, 2011. If convicted, both could face up to 5 years in state prison and a $50,000 fine. Each of the subjects has been released on $10,000 bail.
According to investigators, Russell/Thompson, Inc. was a second tier framing subcontractor hired to construct dormitories at the University of California, Davis. The owners submitted certified payroll reports to the Employment Development Department (EDD) listing paid wages of over $900,000 to their employees; however, they failed to report this to the State Compensation Insurance Fund (SCIF).
On July 7, 2010, a search warrant was executed on the Thompson residence in Shasta County, which was also listed as their business address. The search warrant resulted in the seizure of the company's financial and business records. A financial audit was performed by SCIF and it was determined that the company had underreported close to $358,000 in premiums to SCIF, their insurance carrier.
This case was the result of a joint investigation between the Shasta County District Attorney's Office, the California Department of Insurance, Fraud Division, SCIF and the EDD.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $259 billion in premiums annually in California. In 2014 the California Department of Insurance received more than 175,000 calls from consumers and helped recover over $63 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.