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California Janitorial Company Owners Arraigned for $2.4M Insurance Fraud

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The husband-and-wife owners of a janitorial company were arraigned on multiple felony counts of insurance fraud after an investigation allegedly found the couple underreported payroll for their company by more than $2.4 million to illegally save on workers’ compensation insurance premiums.

The California Department of Insurance began an investigation into Team Janitorial owners Jose Arredondo, of Fontana, 50, and his wife, Olga Chaves, 45, after an employee of their company sustained a work-related injury and the insurer providing workers’ compensation insurance suspected fraud.

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The department’s investigation reportedly found the employee who was injured worked for the company since 2015, but the workers’ comp policy for the company began September 2018 through September 2019.

According to the investigation, Arredondo and Chaves had a previous workers’ comp insurance policy with a different insurance carrier from April 14, 2018, to July 11, 2018, under the business name Team Janitorial with a different business address. The policy was cancelled due to non-payment and because Arredondo and Chaves did not comply with the audit, the investigation shows.

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Arredondo and Chaves reportedly had a pattern of remaining with the carrier until they were notified of an audit. Instead of complying with the audits, they reportedly changed carriers and made it appear as though their business was a new venture by changing the company name, ownership and/or address. This enabled them to avoid disclosing their true payroll, and reduce their premiums, rate and cost of insurance.

An audit revealed Team Janitorial had an estimated payroll of $2.5 million from April 14, 2018, through Sept. 7, 2023. Arredondo and Chaves underreported payroll to their insurance carriers by roughly $2.4 million, resulting in a premium loss of roughly $436,717.

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The San Bernardino County District Attorney’s Office is prosecuting the case.

Topics
California
Fraud

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