Insurance Commissioner Jones Announces Conviction Of Los Gatos Business Owner For Insurance Fraud And Perjury
News: 2011 Press Release
Insurance Commissioner Dave Jones today announced that Ronald J. Haas Sr., 69, has been convicted on 10 counts of Insurance fraud for failing to accurately report payroll to his workers' compensation insurance carriers and the Employment Development Department (EDD) and for failing to pay insurance premiums to the State Compensation Insurance Fund (SCIF), and First Comp. Haas was sentenced to one year in the county jail and restitution to the entities involved, and three years probation.
"Workers' compensation insurance premium fraud is an egregious offense and it will be fully investigated by my Department," said Commissioner Dave Jones. "Those who would seek to cheat a fund to help workers who were legitimately injured will be prosecuted to the fullest extent of the law."
On January 12, 2007, State Compensation Insurance Fund Special (SCIF) submitted a Suspected Fraudulent Claim Referral Form (FD-1) to the California Department of Insurance, Fraud Division, for investigation of suspected workers' compensation insurance premium fraud. The referral alleged that Haas, President of R J Haas Construction Corporation, et al., Saratoga, CA, failed to accurately report employee payroll to his workers' compensation insurance carrier, SCIF. From July 1, 1998 to June 1, 2005, Haas claimed that he had no employees and that sub-contractors did all the work for his company. However, during this period, four workers' compensation claims were filed by injured employees. Haas reported payroll to SCIF only after an injury was discovered and then payroll reporting stopped shortly thereafter, with the cancellation of his SCIF policy. Subsequently, Haas obtained workers compensation insurance policies through First Comp and again reported minimal to no employees.
An investigation by the Silicon Valley Regional Office of the California Department of Insurance, Fraud Division and the California Employment Development Department (EDD) revealed that Haas misrepresented office staff, project superintendents, foremen, and even some of his own family members as subcontractors. A forensic audit was conducted and revealed that Haas owed $594,293.22 in insurance premiums to SCIF, $229,167.71 in insurance premiums to First Comp and $813,328.27 to EDD for failing to accurately report employee payroll for the purpose of determining employment tax liabilities.
On April 29, 2009, Haas was arrested for felony violations of Insurance Code. Haas is eligible to apply for a home electronic monitoring program in lieu of county jail time. At time of sentencing Haas had already paid the full amount of restitution owed to insurance carriers SCIF and First Comp and to EDD.
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 www.insurance.ca.gov 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.