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.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 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 website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.