Tar and Feather


Punishment by tar and feathers was once used as an unofficial way to enforce justice. Thankfully, our current justice system doesn’t use that form of punishment to discipline those who break the law today. However, the owner of a California paving company got tarred with his own brush while attempting to avoid paying workers’ compensation benefits to a legitimately injured employee. (Fortunately, no feathers were plucked, nor any birds harmed during the case.)

An employee of the paving company reported an injury while working a job at a local university campus. As a result, he filed for workers’ compensation. The owner of the company denied that the worker was employed by the company. (That’s a real slap in the face.)An investigation ensued and it was determined that the employee’s claim was legitimate. Investigators also found some other interesting information that led them to believe there was criminal conduct by the owner and his company.

The paving company owner pleaded guilty to one count each of tax fraud, workers’ compensation fraud, supplying false or fraudulent payroll documents and violating a section of the California Labor Code. (Right at home in creating a hot mess.)When he is sentenced he is expected to serve one year in county jail. In addition, the judge most likely will order him to repay a total of $165,000 to the Employment Development Department, the Franchise Tax Board, the State Compensation Insurance Fund and a small business workers’ compensation insurance company.

Employers are required to purchase insurance that benefits employees who incur work-related injuries. This is a win-win for both employers and employees. Employees get benefits no matter who is at fault and employers are protected from potential lawsuits from disgruntled employees. This paving company owner did everything he could do to shirk his duties as a responsible employer, but in the end he was stuck. (How apropos.)

Source: Today’s ”Fraud of the Day” is based on an article, ”Paving Company Owner Pleads Guilty to Fraud,” published by the Santa Barbara Independent on July 22, 2016.

Pleading guilty to one count each of tax fraud, workers’ compensation fraud, supplying false or fraudulent payroll documents, and a violation of Labor Code Section 1779, Alberto Rodriguez, owner of United Seal Coating and Slurry Seal, is expected to be sentenced to one year in county jail next January. The case began when one of United Seal Coating’s workers at a job on the UCSB campus was injured and filed for workers’ comp. Rodriguez denied the worker was his employee, and the subsequent investigation, which originated in September 2013, not only proved the worker was his but also led investigators to other criminal conduct by Rodriguez and his business.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.