Insurance Commissioner, State Labor Commissioner return hundreds of thousands in stolen wages to LA workers

News: 2023 Press Release

LOS ANGELES – On Monday California Insurance Commissioner Ricardo Lara and California Labor Commissioner Lilia Garcia-Brower, announced the resolution of criminal charges filed against Golden Food, Inc (GFI). A plea agreement was reached with GFI wherein the company admitted to a litany of labor violations, which includes over $437,000 in stolen wages to be paid back to more than 30 California workers.

“Our economy depends on workers. Golden Food violated the law, risking the safety of their employees and failing to pay them for their hard work,” said Ricardo Lara, California Insurance Commissioner. “My office, the Labor Commissioner’s Office, the District Attorney’s Office and our law enforcement partners are committed to preventing fraud and abuse and securing justice for California's workers."

Golden Food Inc. (GFI), a chicken processing business located in South El Monte, entered into a plea agreement after an investigation by the California Department of Insurance (CDI) and the California Labor Commissioner’s Office (LCO). The business, owned by Feng Wen Lam and operated by her husband Wei Wu, was accused of underreporting its payroll to its workers’ compensation insurance carriers by $4,489,390.55 between 2015 and 2021. This resulted in a loss of $1,681,138.80 in unpaid insurance premiums to four insurance companies, including the State Compensation Insurance Fund (SCIF).

“These employers purposefully denied workers hard-earned wages with illegal and fraudulent schemes to falsify records, coerce employees to work off the clock and deny break periods,” said California Labor Commissioner Lilia García-Brower. “Thanks to the excellent work and collaboration between our agencies, we were able to hold the employers accountable for these atrocious business practices. I applaud the California Department of Insurance, Los Angeles District Attorney’s Office, State Compensation Insurance Fund and other insurers who worked together to produce an outstanding result for these workers. My office continues its commitment to investigate and combat wage theft, to ensure workers are paid for the labor they provide.”

CDI received a referral from SCIF, who suspected the business of fraud after comparing the payroll reported during annual audits with the payroll reported to the Employment Development Department. CDI obtained a search warrant for GFI's building and was able to obtain true payroll records from GFI's computer, as well as fake tax reporting forms that GFI used to perpetrate its fraud. The investigation led to 43 felony counts of insurance fraud, grand theft, and conspiracy against Lam and Wu.

The LCO’s parallel investigation uncovered significant wage theft over many years. Employees were forced to clock out for breaks and continue to work, were not paid overtime pay for work in excess of 40 weekly hours, and their pay stubs were falsified. Wu routinely deducted work hours from employees and falsely counted that pay as a bonus. An audit by LCO found that Lam and Wu failed to pay at least $437,542.56 in labor to their 34 employees based on the minimum legal market value.

The illegal underpayment of workers' compensation insurance in California negatively affects consumers. It undermines the financial stability of the insurance system, shifting costs onto other policyholders. It also jeopardizes the availability of benefits for injured workers, hindering their access to necessary support. Unfair competition arises as fraudulent businesses gain an advantage over ethical ones. These consequences destabilize the insurance system, compromise benefits for injured workers, and create an unfair business environment, ultimately harming consumers in terms of higher costs, limited access to support, and reduced economic stability.

Experts at the Department of Insurance are dedicated to protecting consumers by rigorously investigating cases of alleged illegal acts by insurance companies and individuals.

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