FROM:
Amy Cornell, Public Information Officer
(408) 792-2997 CONTACT PERSON:
Janice Doi, Deputy District Attorney
(408) 792-2459 For release on August 3, 2009 NEW CENTURY TRANSPORTATION OPERATOR PLEADS GUILTY TO MULTIPLE CHARGES IN WORKERS’ COMPENSATION INSURANCE FRAUD CASE 52-year old Gerald Quint, of San Jose, pled guilty Thursday to various charges of felony workers’ compensation insurance premium fraud, income and corporate tax evasion, and unemployment insurance tax evasion. Quint, who operated New Century Transportation from 1996 to 2009, defrauded several agencies of more than two million dollars in workers’ compensation insurance premiums and payroll and income taxes between 2002 and 2008. A joint investigation by the District Attorney’s Office, the California Department of Insurance, the Franchise Tax Board, and the Employment Development Department revealed that New Century Transportation failed to report more than $4.5 million dollars in paid wages to the Employment Development Department, as required by law. The investigation revealed that the company withheld payroll taxes from employees’ wages, and Quint and New Century co-owner Susan Stommel, pocketed the funds, instead of turning them over to the EDD. As a result of this scheme, the defendants defrauded EDD of more than $280,000. In addition, because paid wages are used as the primary basis to calculate a business’ workers’ compensation insurance premium, such gross underreporting in payroll also illegally and substantially lowered the workers’ compensation insurance premium for New Century. The estimated total amount of premium defrauded between 2003 and 2006 is over $1.3 million. Finally, the investigation showed that the defendants failed to report nearly $11 million in New Century’s revenue from 2002 through 2005, resulting in evasion of over $480,000 in state corporate and personal income taxes. In 2007, after the defendant was arrested and charged with the fraud committed for the period 2003 through 2006, Quint continued to evade taxes and defraud workers’ compensation insurance carriers during 2007 of about $100,000, for which he was charged with additional counts of workers’ compensation insurance premium fraud and payroll tax evasion, and personal and corporate income tax evasion. Again, in April 2009, Quint was charged with additional counts of payroll and income tax evasion for 2008 of about $30,000. New Century provided transportation services throughout Santa Clara Valley. It previously contracted with Santa Clara County’s Valley Transportation Authority (VTA) to provide Altamont Commuter Express (ACE) shuttle services and Downtown Area Shuttle (DASH) services. In addition, it contracted with corporations to run shuttle buses from major transportation hubs and light rail stations to corporate offices. Quint will be sentenced on August 20, 2009, at 9:00am in Department 30. If Quint is able to pay full restitution to the Employment Development Department, the Franchise Tax Board, the State Compensation Insurance Fund, First Comp and the Insurance Corporation of New York, by December 2009, he will receive a sentence of five years in prison. If he is unable to meet all restitution requirements by that time, Quint will be sentenced to ten years in prison. ###
Amy Cornell, Public Information Officer
(408) 792-2997 CONTACT PERSON:
Janice Doi, Deputy District Attorney
(408) 792-2459 For release on August 3, 2009 NEW CENTURY TRANSPORTATION OPERATOR PLEADS GUILTY TO MULTIPLE CHARGES IN WORKERS’ COMPENSATION INSURANCE FRAUD CASE 52-year old Gerald Quint, of San Jose, pled guilty Thursday to various charges of felony workers’ compensation insurance premium fraud, income and corporate tax evasion, and unemployment insurance tax evasion. Quint, who operated New Century Transportation from 1996 to 2009, defrauded several agencies of more than two million dollars in workers’ compensation insurance premiums and payroll and income taxes between 2002 and 2008. A joint investigation by the District Attorney’s Office, the California Department of Insurance, the Franchise Tax Board, and the Employment Development Department revealed that New Century Transportation failed to report more than $4.5 million dollars in paid wages to the Employment Development Department, as required by law. The investigation revealed that the company withheld payroll taxes from employees’ wages, and Quint and New Century co-owner Susan Stommel, pocketed the funds, instead of turning them over to the EDD. As a result of this scheme, the defendants defrauded EDD of more than $280,000. In addition, because paid wages are used as the primary basis to calculate a business’ workers’ compensation insurance premium, such gross underreporting in payroll also illegally and substantially lowered the workers’ compensation insurance premium for New Century. The estimated total amount of premium defrauded between 2003 and 2006 is over $1.3 million. Finally, the investigation showed that the defendants failed to report nearly $11 million in New Century’s revenue from 2002 through 2005, resulting in evasion of over $480,000 in state corporate and personal income taxes. In 2007, after the defendant was arrested and charged with the fraud committed for the period 2003 through 2006, Quint continued to evade taxes and defraud workers’ compensation insurance carriers during 2007 of about $100,000, for which he was charged with additional counts of workers’ compensation insurance premium fraud and payroll tax evasion, and personal and corporate income tax evasion. Again, in April 2009, Quint was charged with additional counts of payroll and income tax evasion for 2008 of about $30,000. New Century provided transportation services throughout Santa Clara Valley. It previously contracted with Santa Clara County’s Valley Transportation Authority (VTA) to provide Altamont Commuter Express (ACE) shuttle services and Downtown Area Shuttle (DASH) services. In addition, it contracted with corporations to run shuttle buses from major transportation hubs and light rail stations to corporate offices. Quint will be sentenced on August 20, 2009, at 9:00am in Department 30. If Quint is able to pay full restitution to the Employment Development Department, the Franchise Tax Board, the State Compensation Insurance Fund, First Comp and the Insurance Corporation of New York, by December 2009, he will receive a sentence of five years in prison. If he is unable to meet all restitution requirements by that time, Quint will be sentenced to ten years in prison. ###