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CA Department of Insurance

Fresno construction company owner arrested in nearly $1 million workers’ compensation scheme

News: 2021 Press Release

For Release: May 6, 2021
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Fresno construction company owner arrested in nearly $1 million workers’ compensation scheme

FRESNO, Calif. — Carolyn Plaza of Fresno self-surrendered on May 6, 2021, after a warrant for her arrest was issued on six felony counts of insurance fraud. A complaint filed on April 16, 2021, alleges Plaza underreported more than $3 million in employee payroll in order to fraudulently reduce her company’s workers’ compensation insurance premium by nearly $1 million.

Plaza, 41, is the co-owner of Absolute Urethane, Inc., a construction contracting business serving the Fresno and surrounding Central Valley areas since 2006. The California Department of Insurance began an investigation after receiving a tip from the State Compensation Insurance Fund (State Fund) alleging Plaza had manipulated payroll reports to avoid paying higher insurance premiums.

The Department of Insurance investigation uncovered that Plaza had provided false payroll records to State Fund for multiple policy years. After comparing those payroll records to the records she reported to the Employment Development Department, the investigation discovered that Plaza underreported $3,146,863 in employee payroll over five years. Plaza’s underreporting resulted in a $985,091 loss in premium to State Fund.

“When business owners illegally underreport payroll, they are hurting legitimate businesses who pay the price through higher insurance premiums,” said Insurance Commissioner Ricardo Lara. “Exposing fraud is critical to protect workers and businesses, especially now during the pandemic when our small businesses and consumers are struggling more than ever.”

“The Fresno County District Attorney’s Office works closely with the Department of Insurance to prosecute all types of workers’ compensation fraud, including when a company underreports payroll,” said Chief Deputy District Attorney Scott Hoedt. “The District Attorney’s Office seeks to hold individuals responsible when they commit fraud to gain a competitive edge. These practices not only hurt other businesses but put the perpetrator’s employees at risk.”

Employers are required to maintain workers’ compensation insurance to cover their employees in the event of an accidental on-the-job injury. To ensure proper coverage, employers are required to accurately report the number of employees, job classifications, and the amount of payroll expended. One of the common ways in which employers avoid paying insurance premiums is to underreport a business’s payroll by providing false payroll reports to their insurance company.

In this case, Plaza’s underreporting significantly lowered the premiums owed. Businesses that fraudulently lower their premiums benefit from an unfair market advantage, giving them the ability to charge less in labor costs, and thereby underbid businesses who pay the appropriate premiums. 

Arraignment is scheduled for June 28, 2021, in the Fresno County Superior Court. The Fresno 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 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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