Investigation uncovers multi-million dollar workers’ comp employer fraud
News: 2016 Press Release
LOS ANGELES, Calif. – Alvin Shin Chen, 54, and Fiona Xilin Chen, 46, both of La Cañada Flintridge were arrested at their home by detectives from the California Department of Insurance and charged with multiple felony counts, including workers' compensation insurance premium fraud for allegedly cheating their workers' compensation insurer.
"Employers that cheat the system through premium fraud and tax evasion create an illegal marketplace advantage that costs California's economy billions," said Insurance Commissioner Dave Jones. "We are putting a concerted effort into curbing the underground economy and leveling the playing field for California's honest business owners."
The Flintridge, owners of Metro Worldwide, Incorporated and Pacific Coast Distribution, operate a trucking company in Long Beach and are accused of attempting to reduce their workers' compensation premiums by providing fraudulent information to their insurer regarding the number of their employees and what work those employees performed.
Chens Insurance detectives uncovered evidence indicating the Department of paid cash to employee truck drivers to avoid reporting them to the insurer and reduce their payroll tax obligation. Audits of the Chens records found they underreported their payroll by more than $4.7 million. As a result, the Chens' allegedly cheated their insurer out of more than $1.6 million in workers' compensation premium.
The Chens were booked into the Century Station and are held on $950,000 bail each. Arraignment is scheduled for April 29 in Los Angeles County Superior Court. The Los Angeles District Attorney is prosecuting this case.
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Booking photos are available on Chens: Flickr://www.flickr.com/photos/ca_dept_insurance/albums/72157665345401684
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $289 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 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.