Menu
Contact Us Search
CA Department of Insurance

Insurance Commissioner Jones announces sentencing of Bay Area Business Owner for Premium Fraud

Dave Althausen
August 4, 2011 9:38 AM

On June 9, 2011, Daniel Ethan Nelson, 49, was sentenced on one felony count of workers' compensation insurance premium fraud. Nelson was sentenced to four months in the County jail, three years formal probation, and ordered to pay restitution in the amount of $55,000.

An investigation conducted by the California Department of Insurance, Fraud Division, and the Santa Clara County District Attorney's Office found that Worldwide Attractions and Monster Magic LLC, entertainment companies specializing in Halloween related attractions, under their parent company Blue Wave Holdings committed workers' compensation insurance premium fraud by not reporting employees on payroll reports to the State Compensation Insurance Fund (SCIF). It was also alleged that SCIF insured several Blue Wave Holding's subsidiary companies that failed to disclose other entities, and operations they were involved in as required on the initial workers' compensation applications. Nelson is alleged to be the principle individual in charge of Blue Wave Holdings and its' subsidiary companies.

CDI's investigation revealed that between January of 2006 and December of 2006 Worldwide Attractions/Monster Magic LLC was found to have intentionally underreported its' payroll to SCIF by as much as $77,164.11. The underreported payroll resulted in a premium loss to SCIF of approximately $11,255.55. Evidence seized from Worldwide Attractions/Monster Magic LLC/Blue Wave Holdings bank accounts, revealed an additional $507,178.16 in payroll that was found to have been unreported to SCIF. The discovery of the additional unreported payroll increased the premium loss to SCIF to approximately $57,327.68.

The case was prosecuted by the Santa Clara County District Attorney's Office. CDI was also assisted by the Employment Development Department (EDD) and the Special Investigations Unit (SIU) from the State Compensation Insurance Fund (SCIF).

 

 

Font Size: Translate: Español