| For Immediate Release Case # 12ZF0145
September 19, 2012 |
Susan Kang Schroeder Chief of Staff Office: 714-347-8408 Cell: 714-292-2718 Farrah Emami
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OWNER, WIFE, AND TWO EMPLOYEES TO BE ARRAIGNED FOR $1.5 MILLION TAX AND WORKERS’ COMP INSURANCE FRAUD SCHEME
SANTA ANA – Four defendants will be arraigned on an indictment tomorrow for a $1.5 million scheme involving failing to file taxes and committing workers’ compensation insurance fraud for their business, Best Value Roofing (BVR). The four defendants, including BVR’s owner, his wife, and two employees, are scheduled for a continued arraignment tomorrow, Thursday, Sept. 20, 2012, at 9:00 a.m. in Department C-5, Central Justice Center, Santa Ana.
This case was investigated by the Premium Fraud Task Force comprised of the California Department of Insurance (DOI), Contractors State License Board (CSLB), Employment Development Department (EDD), California Franchise Tax Board (FTB), and Orange County District Attorney’s Office (OCDA).
In August 2012, the OCDA presented evidence over four days to the Orange County Grand Jury, who listened to testimony from 25 witnesses before returning a 66-felony count indictment. Deputy District Attorney Debbie Jackson of the OCDA’s Workers’ Compensation Insurance Fraud Unit is prosecuting this case.
Defendants
Ernesto Eric Enriquez, 45, Mission Viejo, Owner of BVR, is charged with four felony counts of the willful failure to file or making fraudulent tax returns, 10 felony counts of failing to file a return with the intent to evade tax, 10 felony counts of the willful failure to pay tax, 12 felony counts of misrepresenting facts to the State Compensation Insurance Fund (SCIF), and two felony counts each of perjury by declaration, recording a false and forged instrument, and filing a false tax return. He faces sentencing enhancements for aggravated white collar crime over $500,000 and crime-bail-crime for committing additional fraud while out on bail in this case. Ernesto Enriquez is out of custody on $50,000 bail and faces a maximum sentence of 46 years and four months in state prison if convicted.
Carlos Enriquez, 41, Helendale, CA, brother of Ernesto Enriquez, is charged with 12 felony counts of misrepresenting facts to SCIF and sentencing enhancements for aggravated white collar crime over $500,000. Carlos Enriquez is out of custody on $50,000 bail and faces a maximum sentence of 16 years in state prison if convicted.
Anne Elizabeth Sbrizzi-Enriquez, 49, Mission Viejo, wife of Ernesto Enriquez, is charged with 11 felony counts of the willful failure to file or making fraudulent tax returns, two felony counts of filing a false tax return, and one felony count each of perjury by declaration and recording a false and forged instrument. She faces sentencing enhancements for crime-bail-crime for committing additional fraud while out on bail in this case. Sbrizzi-Enriquez is out of custody on $50,000 bail and faces a maximum sentence of five years in state prison if convicted.
Sheila Marie DiMauro, 44, Apple Valley, friend of the Enriquez family, is charged with 20 felony counts of filing a false statement, five felony counts of misrepresenting facts to SCIF, and one felony count each of perjury by declaration and recording a false and forged instrument. She faces sentencing enhancements for aggravated white collar crime over $500,000. DiMauro is out of custody on $50,000 bail and faces a maximum sentence of 23 years in state prison if convicted.
Law Regarding Premium Insurance
California law requires that all employers maintain workers’ compensation insurance for their employees. Payroll records showing the number of employees and their income must be submitted to both the workers’ compensation insurance company and EDD, who oversee the collection of payroll taxes. Workers’ compensation insurance rates are determined by a formula, which takes into consideration the number and type of employees and the company’s history of injury claims.
Premium insurance fraud is committed when an employer intentionally misrepresents to the state or insurance company the number of employees, the type of work performed, the amount of payroll, and the loss history. These illegal misrepresentations allow deceitful employers to calculate and purchase workers’ compensation insurance at a significantly lower premium rate, or to avoid purchasing the insurance at all. This practice places their competitors at a disadvantage because it forces them to compete against a company with fraudulently lower operating costs.
Premium fraud drives up the cost of insurance premiums for legitimate businesses that pay higher rates for their employees’ workers’ compensation insurance coverage. These legitimate businesses are less competitive against crooked companies who are able to under-bid their competitors due to lower business costs resulting from insurance fraud. This also endangers injured employees who may be denied workers’ compensation.