SACRAMENTO- On September 10, 2015, a Sacramento man, Michael George Mello Jr., 37, and his sister, Mary Catherine Rodriguez, 38, pleaded no contest and were sentenced for workers' compensation insurance fraud and tax evasion.
For three years, the two owners of Sacramento-based Green Valley Landscaping Services, committed workers' compensation insurance premium fraud by significantly underreporting the number of employees and payroll in their business. This went on between July 2010 and July 2013.
"Insurance fraud is not a victimless crime," said Insurance Commissioner Dave Jones. "Not only were numerous people in this case put at risk, but every consumer and legitimate business pays the price for workers' compensation insurance fraud as insurers pass their losses on to policyholders and businesses then pass their increased costs to consumers."
The fraud committed by Mello and Rodriguez left employees at risk, and homeowners who hired them, financially vulnerable and liable for possible injuries. The business owners cheated workers' compensation insurance carriers out of $144,672 in premiums and the Employment Development Department (EDD) out of $110,462 in payroll taxes.
Mello was sentenced to 30 days in county jail, five years formal probation and ordered to pay $144,672 in restitution to insurance companies and $110,462 to EDD.
Rodriguez was sentenced to 3 years probation, 50 hours of community service and order to pay EDD $110,462 in restitution jointly with her brother.
"This case should put business owners on notice," said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona. "Investigators from the Department of Insurance, Employment Development Department and the Department of Industrial Relations are teaming up and sharing resources to put a stop to fraud. This is an efficient and effective means for speeding up investigations and turning cases over to district attorneys' offices for prosecution."