FOUR DEFENDANTS CHARGED WITH COMMITTING OVER $12 MILLION IN TAX AND WORKERS’ COMPENSATION INSURANCE FRAUD

FOUR DEFENDANTS CHARGED WITH COMMITTING OVER $12 MILLION IN TAX AND WORKERS’ COMPENSATION INSURANCE FRAUD

*Defendants include married owners, general manager and son

SANTA ANA – Four defendants, including married owners and the general manager and his son, were in court today on charges of committing more than $12 million in tax and Workers’ Compensation Insurance fraud for their demolition company, Democo Corporation (Democo). A 144 count complaint has been filed against married business owners Joseph Perry Soares, 47, and Kimberly Jane Soares, 43, both of La Habra Heights, general manager James Gregory Campbell, 59, Lakewood, and his son Robert Scott Campbell, 26, Bellevue, WA.  The felony charges include conspiracy, perjury, grand theft, forgery, identity theft, misrepresenting facts to State Compensation Insurance Fund, recording false and forged documents, making fraudulent statements, making false statements to discourage workers from claiming benefits, willfully failing to file tax returns, filing false tax returns, and sentencing enhancements for loss over $2.5 million, $1 million, and $150,000. If convicted on all counts, the defendants face a sentence ranging from probation up to approximately 91 years in state prison.

The defendants are each being held on $2.5 million bail and must prove the money is from a legal and legitimate source before posting bail. James Campbell is scheduled for continued arraignment and defendants Robert Campbell and Joseph and Kimberly Soares are scheduled for a pre-trial hearing on May 15, 2009, at 9:00 a.m. in Department C-55, Central Justice Center, Santa Ana. 

For their assistance, the Orange County District Attorney’s Office would like to thank the California Department of Insurance, Franchise Tax Board, and the Employment Development Department (EDD).

Husband and wife defendants Joseph and Kimberly Soares are accused of owning Democo, a demolition and construction clean-up company. James Campbell is accused of working as the general manager for Democo. Robert Campbell is James Campbell’s son.

Workers’ Compensation Insurance premiums for businesses are determined by the insurance company based on information provided to them by the insured business, including the number of employees, the classification of work performed by those employees, and payroll. In order for demolition businesses to retain work, they must provide a certificate showing that the business has Workers’ Compensation Insurance.

Between Dec. 21, 2001, and March 1, 2009, the defendants are accused of conspiring to commit insurance fraud by failing to pay over $5.7 million in insurance premiums to State Compensation Insurance Fund (SCIF), a quasi-governmental non-profit insurance company established by the California State Legislature.  The defendants are accused of failing to secure Workers’ Compensation Insurance for Democo employees, numbering 60 and 120 at a given time during this eight year period. The defendants are accused of falsely claiming only one full-time and one part-time clerical staff, to obtain insurance through SCIF. Democo needed to have a certificate showing they had Workers’ Compensation Insurance in order to obtain work contracts. They are accused of falsely stating to SCIF that the demolitionists employed by Democo were sub-contractors to avoid paying insurance for them.