Bay area business owner arrested in $32 million workers’ comp fraud scheme
News: 2017 Press Release
According to Department of Insurance detectives, over a seven-year period Gregori, owner of GMG Janitorial, GMG Billings, and Apex Janitorial Solutions, allegedly falsified documents and underreported payroll to her workers' compensation insurance company. The department's investigation revealed Gregori was keeping two sets of books, using a payroll processing service to report to Employment Development Department and pay her employees, and keeping a fraudulent set of books that she provided to insurers and insurance auditors, which showed a significantly lower payroll amount.
"People often make the mistake of thinking insurance fraud is a victimless crime—it is not," said Insurance Commissioner Dave Jones. "When business owners cheat the system by operating in the underground economy, they create an unfair advantage that puts legitimate business at risk."
GMG is a large janitorial company operating throughout the Bay area and Southern California, employing more than 200 employees from July 2009 through December 2016.
Full list of charges:
- 7 felony counts of Insurance Code Section 11880(a), make or cause to be made any knowingly false or fraudulent statement, of any fact material to the determination of the premium, rate, or cost of any policy of workers' compensation insurance issued or administered by the State Compensation Insurance Fund for the purpose of reducing the premium, rate, or cost of the insurance.
- 1 felony count of Insurance Code Section 11760(a), make or cause to be made any knowingly false or fraudulent statement, whether made orally or in writing, of any fact material to the determination of the premium, rate, or cost of any policy of workers' compensation insurance, for the purpose of reducing the premium, rate, or cost of the insurance.
- 2 felony counts of Penal Code Section 487(a) grand theft, money, labor, or real or personal property taken of a value exceeding nine hundred fifty dollars ($950).
- 2 counts of Penal Code Section 186.11(a)(2), a white collar crime enhancement for fraud exceeding $500,000.00.
- 4 counts of Penal Code Section 12022.6(A)(2), in the commission of a felony took property of a value exceeding $200,000.00.
- 2 counts of Penal Code Section 12022.6(A)(3), in the commission of a felony took property of a value exceeding $1,300,000.00.
- 1 counts of Penal Code Section 12022.6(A)(4), in the commission of a felony took property of a value exceeding $3,000,000.00.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $288 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 $394 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.