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Business owner fails to report payroll and is arrested on premium insurance fraud

News: 2014 Press Release

For Release: May 15, 2014
Media Calls Only: 916-492-3566
Email Inquiries: cdipress@insurance.ca.gov

Business owner fails to report payroll and is arrested on premium insurance fraud

SAN LUIS OBISPO, Calif. - A Paso Robles man was arrested for allegedly failing to correctly report his employee payroll to the State Compensation Insurance Fund. Jay Scott Silva, 53, owner of Drywall Dynamics, was arrested last month by the San Luis Obispo County District Attorney's Office and booked into the county jail on two felony counts of workers' compensation insurance fraud.

"Premium insurance fraud is not a victimless crime," said Insurance Commissioner Dave Jones. "Actions like Silva's are what artificially inflate costs to insurers, consumers and California taxpayers. The Department of Insurance is committed to working with other allied agencies to combat the multi-billion dollar enterprise that is fraud."

The California Department of Insurance began its investigation after the Carpenters/Contractors Cooperation Committee notified the department's Fraud Division of Silva's improper conduct regarding employee wages. Department investigators determined Silva was incorrectly reporting employee payroll, which reduced his rate of paid premium by $67,000.

"Workers' compensation premium fraud hurts hard working men and women trying to make a living and feed their families," said David Kersh, Executive Director of the Carpenters/Contractors Cooperation Committee. "It hurts honest employers that play by the rules and want to create good paying employment opportunities in our communities. In addition to the issue of premium fraud, Drywall Dynamics had also cheated its workers out of hundreds of thousands of dollars in wages. We applaud the work done by the Department of Insurance in cracking down on construction contractors that break the law."

If convicted Silva faces a maximum of five years in jail, possible fines and full restitution. Bail was set at $30,000.

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Media Notes:

  • Two felony counts: 11880(a) IC.
  • Total loss of $67,000.
  • No booking photo available.


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.

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