When an insurance company suspected the owner of Genesis Building Services, a San Mateo pest and janitorial services company, was under-reporting her payroll to the tune of $10 million dollars, that insurance company went straight to our CSLEA members who are investigators with the California Department of Insurance (CDI).
As a result of their investigation, Genesis Building Services owner Teresa Reif, 34, was arrested in April 2011 on a warrant that cited 44 counts of fraud. She later pleaded no contest to eight counts and this week was sentenced to a year in jail, followed by five years supervised probation and ordered to repay about $2 million in restitution.
According to the investigation, by under-reporting $10 million dollars in payroll, Reif avoided paying nearly $3 million in workers comp insurance premiums. Genesis allegedly employed more than 140 workers but Reif reported fewer than 70 employees and had fraudulent paper work to prove the false number.
North Carolina Workers' Compensation Journal listed this case as one of top 10 employer fraud cases in 2011.
"Fraudulent business owners beware," said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona. "Our CSLEA members who are CDI investigators fully investigate suspected violations and turn over to prosecutors very strong cases that result in conviction and sentencing. Fraud will not be tolerated, it's not fair to law-abiding business owners and it often means prison time. Our investigators are great at what they do."