California business owner couple arrested in $4.5 million worker compensation fraud scheme
Wei Wen Wu, 54, and Feng Wen Lam, 49, both of Arcadia, Calif., have been charged with 43 counts of insurance fraud, robbery and conspiracy after allegedly under -declared nearly $4.5 million in payroll.
The scheme allegedly fraudulently reduced their company’s workers’ insurance premium, resulting in a loss of $1.7 million in unpaid insurance premiums.
A parallel investigation by the California Department of Industrial Relations allegedly revealed wage theft from employees of the couple’s chicken processing business in El Monte.
Lam owns Golden Food Inc., a chicken processing company employing butchers and meat packers located in El Monte, which receives chicken carcasses and breaks them down into boxes of chicken pieces for sale. Lam’s husband Wu ran the business.
The California Department of Insurance launched an investigation after receiving a recommendation from the State Compensation Insurance Fund, which suspected the company of fraud after comparing payrolls reported during annual audits with payrolls reported to the Department of Development. use.
After obtaining search warrants for GFI, the CDI could have obtained the real payroll records from the company’s computer and found false tax reporting forms.
The investigation reportedly showed that between 2015 and 2021, GFI underreported its payroll to its workers’ carriers by $4.4 million, resulting in a loss of $1.6 million in premiums for four insurers, including State Fund.
In addition to the CDI investigation, the DIR investigation would have revealed that the employees had been forced to take breaks and continue to work, that they had not been paid overtime for work exceeding 40 hours weekly and that their pay stubs had been falsified.
Furthermore, it allegedly revealed that Wu regularly deducted employees’ working hours and mistakenly counted this salary as a bonus. An audit by DIR found that Lam and Wu failed to pay at least $437,542 in labor to their 34 employees based on minimum legal market value.
Wu and Lam are due in court on March 29.
The Los Angeles County District Attorney’s Office Health Care Fraud Division is pursuing the case.
California Workers Compensation Fraud
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