On December 5th, 2012

Fighting Fraud Our EDD Investigators At Work

It took 13 months to investigate and years to see a criminal fraud case through to a conviction and sentence, but our CSLEA members who are investigators with the Employment Development Department went the distance.

Last week, a case against  a Southern California contractor concluded with a seven year prison sentence for Steven Morales, 65, of Wildomar in Riverside County.

"This may very well have been the largest workers' compensation fraud case in the history of Riverside County," said CSLEA President Alan Barcelona.  "Our state investigators work non-stop to find unscrupulous business owners who essentially rip off the state of California and its citizens."

Morales was convicted for defrauding the state of $3 million dollars by not paying workers' compensation and unemployment premiums on about 400 employees.

Morales' son, Brian, 44,  was also charged in the case and pleaded guilty in 2010.  He was sentenced to four years in prison.

"EDD tax investigators strive hard to crack down on the underground economy," said CAFI board director for EDD Daniel Schmidt.  "We bring the offenders to justice and secure restitution from the company/owner for the amount that is owed.  EDD works hard to keep the economy a level playing field for all employers."

The investigation began after laid-off workers from Morales' various companies sought unemployment  and officials found no record of any of the companies named.

Prosecutors said Morales likely committed this type of fraud for 20 years. The prosecution's case focused on crimes between 2005 and 2008.

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