HUSBAND AND WIFE ARRESTED AND CHARGED WITH CALIFORNIA’S LARGEST PREMIUM INSURANCE FRAUD SCAM FOR COMMITTING $38 MILLION IN FRAUD AND SPENDING HIDDEN INCOME ON LAVISH LIFESTYLE

OCDASeal

Orange County District Attorney
Press Release


Tony Rackauckas, District Attorney
401 Civic Center Drive West
Santa Ana, CA 92701

For Immediate Release
Case # 09CF1067

 


 

April 30, 2009

Susan Kang Schroeder
Public Affairs Counsel
Office: 714-347-8408
Cell: 714-292-2718

Farrah Emami
Spokesperson
Office: 714-347-8405
Cell: 714-323-4486

HUSBAND AND WIFE ARRESTED AND CHARGED WITH CALIFORNIA’S LARGEST PREMIUM INSURANCE FRAUD SCAM FOR COMMITTING $38 MILLION IN FRAUD AND SPENDING HIDDEN INCOME ON LAVISH LIFESTYLE
*Over $500,000 in jewelry recovered along with application for “Real Housewives of Orange County”

 

SANTA ANA – A husband and wife accused of living a lavish lifestyle of high-end cars, vacations, and shopping which was financed by committing more than $38 million in premium insurance fraud were arrested yesterday. This is the largest known Workers’ Compensation Insurance fraud case in California’s history. This case was investigated by the Orange County District Attorney’s Office (OCDA) and the Orange County Premium Fraud Task Force, a collaboration of investigators from the OCDA, Department of Insurance (DOI), California Employment Development Department (EDD), Franchise Tax Board, and Contractors State License Board. 

 

Michael Vincent Petronella, also known as Michael Constantine, 50, and his wife Devon Lynn Kile, 44, both of Laguna Hills, are charged with 106 felony counts including conspiracy to commit a crime, grand theft, insurance fraud, filing  a false tax return, willfully failing to file or filing fraudulent tax returns, misrepresenting facts to State Compensation Insurance Fund, making fraudulent statements, making false statements to discourage an injured worker from claiming benefits, misrepresenting facts to workers’ compensation insurance company, and failing to file a return with the intent to evade tax. The defendants both face sentencing enhancements and allegations for aggravated white collar crime over $2.5 million, $500,000, and $100,000. If convicted on all counts, the defendants each face a sentence ranging from five years and four months up to 102 years in state prison. Petronella and Kile are being held on $10 million bail each and must prove the money is from a legal and legitimate source before posting bond. They are expected to be arraigned tomorrow, Friday, May 1, 2009, at 9:00 a.m. at the Central Justice Center in Santa Ana. The Department is to be assigned.  

 

“Unfortunately, this episode may be titled “The Real Insurance Fraud of Orange County’. The `Real citizens of Orange County’ are struggling to keep their houses, put food on the table, and pay for necessities.  This husband and wife team was living a lavish lifestyle. How?  By committing more than $38 million in premium insurance fraud and not paying their taxes,” said District Attorney Tony Rackauckas. “I want to send a message out there that these types of fraud hurt our economy, our infrastructure, and our workers. I want to send a message that if you commit these crimes, you may be looking at the “Real jail cell of Orange County.” 

 

“Employees deserve to be taken care of when they are injured on the job, and this type of workers comp fraud jeopardizes this vital protection,” said Insurance Commissioner Steve Poizner. “We will work tirelessly with our partners like the Orange County District Attorney’s office to track down all types fraud. I want to remind potential criminals out there that no matter how bad the economy is, no matter how enticing it is, if you commit insurance fraud, we will work day and night to bring you to justice.”

 

“This is about all the honest roofers, plumbers and other contractors who can’t possibly compete against a business operating in the underground economy,” said John Barrett, FTB Public Affairs Spokesman. “This isn’t about leveling the playing field. It’s about pulling those operating in the underground into the light of compliance.”