Insurance Commissioner Jones Announces Arrest of Business Owners for Premium Fraud
News: 2011 Press Release
Insurance Commissioner Dave Jones today announced that Valery Alena Thompson, 31, and her husband Earl James Thompson, 47, have been charged with one count each of violating Section 11880(a) of the California Insurance Code. Valery Thompson, President and CEO for Russell/Thompson, Inc. was arrested on May 19, 2011 by authorities in Lakewood, Colorado. Her husband, Earl (EJ) Thompson, Employee and Manager of Russell/Thompson, Inc. surrendered himself to authorities at the Shasta County Jail on May 21, 2011. If convicted, both could face up to 5 years in state prison and a $50,000 fine. Each of the subjects has been released on $10,000 bail.
According to investigators, Russell/Thompson, Inc. was a second tier framing subcontractor hired to construct dormitories at the University of California, Davis. The owners submitted certified payroll reports to the Employment Development Department (EDD) listing paid wages of over $900,000 to their employees; however, they failed to report this to the State Compensation Insurance Fund (SCIF).
On July 7, 2010, a search warrant was executed on the Thompson residence in Shasta County, which was also listed as their business address. The search warrant resulted in the seizure of the company's financial and business records. A financial audit was performed by SCIF and it was determined that the company had underreported close to $358,000 in premiums to SCIF, their insurance carrier.
This case was the result of a joint investigation between the Shasta County District Attorney's Office, the California Department of Insurance, Fraud Division, SCIF and the 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.