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Encino construction company owner arraigned in $25 million workers' compensation fraud scheme

News: 2021 Press Release

For Release: June 1, 2021
Media Calls Only: 916-492-3566
Email Inquiries: cdipress@insurance.ca.gov
Encino construction company owner arraigned in $25 million workers’ compensation fraud scheme

LOS ANGELES, Calif. — Nissim Vaknin, 49, of Encino, was arraigned for felony insurance fraud after an investigation by the California Department of Insurance revealed he allegedly underreported employee payroll by over $70 million in order to fraudulently reduce his business’s premium for workers’ compensation insurance by over $25 million.

The State Compensation Insurance Fund (SCIF) filed a suspected fraudulent claim in 2018 with the Department of Insurance after a routine payroll audit for Van Nuys-based NV Construction, owned by Vaknin, identified large discrepancies.

Department detectives conducted a search warrant of NV Construction’s bank records, which showed that for the policy period of October 2014 through March 2018, Vaknin reported a total of $4,083,483 in payroll to SCIF; however, the Department’s investigation found the actual payroll was $74,741,381. Vaknin underreported payroll by over $70 million, resulting in a premium loss to SCIF of $25,129,032.

“By allegedly underreporting payroll, this business owner not only hurt other businesses who pay for this fraud through higher premiums, he also put their own employees at risk,” said Insurance Commissioner Ricardo Lara. “My Department is committed to investigating fraud in order to protect workers and honest businesses, especially now as our state is struggling through this pandemic.”

Vaknin was arraigned at the Los Angeles Superior Court on May 28, 2021. This case is being prosecuted by the Los Angeles County District Attorney’s Office.

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The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $340 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. 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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