Merced agriculture company owner and daughter arraigned for $2.5 million insurance fraud scheme
News: 2020 Press Release
MERCED, Calif. — Today Felipe Saurez Barocio, 63, of Atwater, owner of Agriculture Services, Inc., and his daughter, Angelita Barocio-Negrete, 33, of Merced, were arraigned on multiple felony counts of insurance fraud after allegedly underreporting employee payroll by $11 million in order to fraudulently reduce the business’s premium for workers’ compensation insurance by over $2.5 million. The alleged fraud potentially left employed farm workers without insurance coverage and at financial risk.
"When businesses illegally underreport payroll and employees they create an unfair advantage that places legitimate businesses at a competitive disadvantage," said Insurance Commissioner Ricardo Lara. "We all pay the price for insurance fraud through increased costs for services and higher premiums."
On October 14, 2019, State Compensation Insurance Fund (SCIF) filed a suspected fraudulent claim with the California Department of Insurance alleging potential insurance fraud. SCIF reported that Barocio, as owner of a farm labor contracting business, allegedly underreported employee payroll in order to reduce the proper rate of insurance premiums owed to SCIF.
An investigation by the California Department of Insurance revealed that between 2015 and 2019, Barocio and his daughter, who worked as the office manager, provided SCIF with fabricated quarterly employee payroll reports. The Department discovered a missing $11 million in payroll when they compared the quarterly reports submitted to SCIF to the quarterly reports submitted to the Employment Development Department. This underreporting of employee payroll resulted in a total loss of $2,582,142 in insurance premiums.
Barocio and his daughter, Barocio-Negrete, will return to court on October 27, 2020. The Merced County District Attorney’s Office is prosecuting this case.
Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.