“Insurance fraud is a widespread problem throughout California and the nation, and it is not a victimless crime. Workers’ comp insurance fraud impacts employees as well as businesses that accurately report their employee payrolls for proper coverage. A company that underreports payroll can be more flexible in providing lower bids than their competitors for jobs because their overhead is reduced due to fraud.”
– CSLEA President Alan Barcelona
LOS ANGELES — On April 3, 2025, the California Department of Insurance (CDI) announced that John Nemandoust, 70, and Annette Assil, 62, both of Los Angeles, were sentenced after a CDI investigation found they underreported more than $21 million in employee payroll for their delivery companies. Nemandoust was sentenced to 60 days in county jail and Assil was sentenced to 30 days. Both were sentenced to 10 years of felony probation and also ordered to pay $2,254,748 in restitution for unpaid workers’ compensation insurance premiums.
CDI launched an investigation into A-1 Valley Services, Prompt Delivery, and Affordable Messenger, the three companies the couple owned, after receiving information that two of the companies were uninsured. The investigation revealed that between 2013 and 2017, the couple only obtained workers’ compensation coverage for Valley Services employees, while leaving Prompt Delivery and Affordable Messenger uninsured.
When employees from the uninsured companies sustained work-related injuries, claims were fraudulently filed under Valley Services’ policy. Over the four-year period, at least 20 uninsured employees had claims improperly filed under Valley Services’ policy.
A forensic audit found that the companies’ combined gross payroll exceeded $25 million, while they only reported approximately $1.4 million to their insurance carrier—resulting in the $21 million payroll underreporting. This scheme allowed the couple to avoid paying approximately $3 million in workers’ compensation insurance premiums.
The Los Angeles County District Attorney’s Office prosecuted the case.
