Monday, November 16, 2009

Ventura County Employer Is Charged Criminally For Not Having Workers' Compensation Insurance

A recent Ventura County District Attorney's case shows a new willingness to prosecute employers criminally for not having workers' compensation insurance. On November 6, 2009, Edward Anthony Cortez of Lompoc, California was arraigned in Ventura County Superior Court on a misdemeanor criminal charge of violating California Labor Code section 3700.5 which is operating a business without obtaining workers' compensation insurance.

A criminal complaint is only an accusation is not evidence of guilt. Mr. Cortez is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

Mr. Cortez is the operator and principal owner of TC Construction Company, a construction company headquartered in Lompoc, California , and doing business in Ventura County. Not surprisingly, this case arose out of a bad factual situation. The complaint arises out of a March 30, 2009, incident when a construction worker hired by Mr. Cortez was injured at a job site in Santa Paula. The injured employee fell about 15 feet and broke his back.

The state becomes involved in these cases since injured employees who work for uninsured employers are forced to seek compensation for their injuries from a program funded by taxpayers known as the Uninsured Employers Benefit Trust Fund. This program is administered by the California Department of Industrial Relations.

An investigation was conducted by the Contractors State License Board and the Ventura County District Attorney's Office Bureau of Investigation. Ventura County District Attorney's Office has a special Workers Compensation Fraud which Unit filed the criminal complaint against Mr. Cortez on or about October 16, 2009.

Labor Code §3700.5 is a misdemeanor and the punishment can include imprisonment in county jail for up to a year and/or a fee up to $10,000.00 for knowingly being uninsured for workers' compensation insurance.

Attorney Commentary: I forecast greater prosecution of these regulatory cases as crimes where state budgets are constrained and there are special prosecution units in the county District Attorney's Offices. In addition, in economically difficult times, employees will be more likely to file workers' compensation claims. We frequently see employees who were paid under the table file claims much to the employers' surprise and chagrin. Employers are being targeted by insurers and the government for premium fraud (underreporting payroll or misclassifying employees) and for not having workers' compensation insurance. Now is the time for employers to comply with the law.

Posted by Tracy Green. Any questions or comments should be directed to: Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have handled numerous workers' compensation fraud cases representing individuals, businesses, medical providers and attorneys. The firm website is


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