An Argus West Premium SIU file was opened after review of a claim file requested by our client. The claim file read that injury occurred when the claimant was ejected from a Chevy suburban being driven by the Foreman of the insured on the way to work. The initial red flag was based on claims by the insured that they did not provide group transportation for their employees. After further investigation, there were four employees who were in the vehicle being transported to work when the accident occurred, resulting in one death. An FD-1 was filed with the Department of Insurance and Sonoma County District Attorney’s Office. An 1877.3 Demand Letter was received, and the completed policy package was provided to the Sonoma County District Attorney’s Office. The District Attorney advised charges were filed against the insured and the initial charges were as follows:

• Charge of 11760(a) Insurance Code of California, workers’ compensation fraud. A felony.
• Charge of 550 (b) (2) Penal Code of California, Insurance Fraud. A Felony

The District Attorney advised both defendants pled to a misdemeanor violation. The insured were ordered to do 60 hours of community service and return in one year. There was no restitution requested as the defendants paid all the policy premiums and had they been honest about the employee transportation the policy would not have been issued, instead of an increase in premiums.