A Humboldt County business owner was arrested June 24, 2014 on felony charges of workers' compensation insurance fraud and grand theft.   A joint investigation by California Department of Insurance detectives and the Humboldt County District Attorney's Office uncovered multiple crimes.

Tim Shelley, 57, owner of Tim's Plumbing was arrested for failing to obtain workers' compensation insurance for his employees. Detectives report they discovered instances in which employees were injured and were discouraged from claiming workers' compensation benefits. As a result, severely injured workers were unable to afford their medical costs for treatment and suffered significant financial hardships.

Further investigation revealed that Shelley was also allegedly operating a warranty replacement scam. The scam involved removing warranty tags on water heaters installed for customers and then turning in a false warranty claim.   According to the investigation, Shelley received a number of free replacement units from the manufacturer.

"Deliberately failing to acquire workers' compensation insurance puts employees in harm's way, financially," said California Statewide Law Enforcement Association President Alan Barcelona.  "To be injured on the job and unable to pay the medical costs because your employer broke the law by not obtaining the proper insurance is a horrible thing.  I am proud of the work our CDI investigator-members do to put a stop to insurance fraud."

If convicted, Shelley faces up to 18 years in state prison and $260,000 in fines.