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CA Department of Insurance

Husband and wife business owners charged in $4.5 million workers’ compensation fraud scheme

News: 2022 Press Release

For Release: January 27, 2022
Media Calls Only: 916-492-3566
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Husband and wife business owners charged in $4.5 million workers’ compensation fraud scheme
Department investigations revealed alleged underreported payroll and wage theft

LOS ANGELES — Wei Wen Wu, 54, and Feng Wen Lam, 49, both of Arcadia, are charged with 43 felony counts of insurance fraud, grand theft, and conspiracy after allegedly underreporting nearly $4.5 million in employee payroll. The scheme fraudulently reduced their company’s workers’ compensation insurance premium resulting in a loss of approximately $1.7 million in unpaid insurance premiums. A parallel investigation by the California Department of Industrial Relations (DIR) uncovered significant wage theft from employees at the couple’s chicken processing business in El Monte.

“These business owners not only allegedly underreported payroll to illegally save on workers’ compensation insurance, they also failed to pay their employees for their hard work,” said Insurance Commissioner Ricardo Lara. “Workers’ compensation fraud can lead to higher insurance premiums for employers who follow the rules and may ultimately hurt workers who are legitimately injured on the job. Thanks to my Department’s detectives, the Department of Industrial Relations and the Los Angeles County District Attorney’s Office, these business owners are being held accountable for their actions.”

“Wage theft takes hard-earned money away from working people and their families,” District Attorney Gascón said. “Unfair business practices like these affect not just workers but also hurt our community by putting law-abiding employers at a competitive disadvantage.”

"Wage theft is a crime that denies workers their pay for a hard day's work. Many victims of this crime go unheard and unnoticed. This unfair business practice not only steals wages from workers, but also provides cheating employers an unfair advantage over law-abiding employers, said California Labor Commissioner Lilia Garcia-Brower. “I commend my team, the California Department of Insurance, and the Los Angeles County District Attorney's Office for their efforts to hold these perpetrators accountable and bring justice to these wage theft victims." 

Lam is the owner of Golden Food Inc. (GFI), a chicken processing business employing butchers and meatpackers located in El Monte, which receives chicken carcasses and breaks them down into boxes of chicken parts for sale. Lam’s husband, Wu, operated the business.

The Department of Insurance launched an investigation after receiving a referral from State Compensation Insurance Fund (State Fund), who suspected the business of fraud after comparing the payroll reported during annual audits with the payroll reported to the Employment Development Department. After obtaining search warrants for GFI, the Department was able to obtain the true payroll records from the company’s computer and found fake tax reporting forms.

The investigation revealed between 2015 and 2021, GFI underreported its payroll to its workers’ compensation insurance carriers by $4,489,390, resulting in a loss of $1,681,138 in unpaid insurance premiums to four insurance companies, including State Fund.

In addition to the Department of Insurance investigation, the California Department of Industrial Relations investigation found employees were forced to clock out for breaks and continue to work, they were not paid overtime for work in excess of 40 weekly hours, and their pay stubs were falsified. Also, it revealed Wu routinely deducted work hours from employees and falsely counted that pay as bonus. An audit by DIR found that Lam and Wu failed to pay at minimum $437,542 in labor to their 34 employees based on the minimum legal market value.

Additional victims of wage theft are encouraged to contact the California Labor Commissioner Office's Criminal Investigator Eduardo Martinez at 818-901-5305 or the Labor Commissioner's Office's Public Information Line at 1-833-526-4636 or To report suspected fraud or for insurance questions consumers can all the Department of Insurance at 800-927-4357.

Wu and Lam are scheduled to appear in court on March 29, 2022, in Department 30 of Foltz Criminal Justice Center. The Los Angeles County District Attorney’s Office’s Healthcare Fraud Division is prosecuting this case.

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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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