“State investigators work to protect California workers, our economy and our financial wellbeing. These investigations can be lengthy and complicated and we appreciate their dedication to protecting others.” – CSLEA President Alan Barcelona
LOS ANGELES – On May 15, 2023, California Insurance Commissioner Ricardo Lara and California Labor Commissioner Lilia Garcia-Brower, announced the resolution of criminal charges filed against Golden Food, Inc (GFI). A plea agreement was reached with GFI wherein the company admitted to labor violations, which include more than $437,000 in stolen wages to be paid back to more than 30 California workers.
GFI, a chicken processing business located in South El Monte, entered into a plea agreement after an investigation by the California Department of Insurance (CDI) and the California Labor Commissioner’s Office (LCO). The business, owned by Feng Wen Lam and operated by her husband Wei Wu, was accused of underreporting its payroll to its workers’ compensation insurance carriers by $4,489,390.55 between 2015 and 2021. This resulted in a loss of $1,681,138.80 in unpaid insurance premiums to four insurance companies, including the State Compensation Insurance Fund (SCIF).
“These employers purposefully denied workers hard-earned wages with illegal and fraudulent schemes to falsify records, coerce employees to work off the clock and deny break periods,” said California Labor Commissioner Lilia García-Brower. “Thanks to the excellent work and collaboration between our agencies, we were able to hold the employers accountable for these atrocious business practices.”
CDI received a referral from SCIF, who suspected the business of fraud after comparing the payroll reported during annual audits with the payroll reported to the Employment Development Department. CDI obtained a search warrant for GFI's building and was able to obtain true payroll records from GFI's computer, as well as fake tax reporting forms that GFI used to perpetrate its fraud. The investigation led to 43 felony counts of insurance fraud, grand theft, and conspiracy against Lam and Wu.
The LCO’s parallel investigation uncovered significant wage theft over many years. Employees were forced to clock out for breaks and continue to work, were not paid overtime pay for work in excess of 40 weekly hours, and their pay stubs were falsified. Wu routinely deducted work hours from employees and falsely counted that pay as a bonus. An audit by LCO found that Lam and Wu failed to pay at least $437,542.56 in labor to their 34 employees based on the minimum legal market value.
The illegal underpayment of workers' compensation insurance in California negatively affects consumers. It undermines the financial stability of the insurance system, shifting costs onto other policyholders. It also jeopardizes the availability of benefits for injured workers, hindering their access to necessary support. Unfair competition arises as fraudulent businesses gain an advantage over ethical ones. These consequences destabilize the insurance system, compromise benefits for injured workers, and create an unfair business environment, ultimately harming consumers in terms of higher costs, limited access to support, and reduced economic stability.