San Jose Father and Son Charged in $4 Million Workers’ Comp Scheme

For release on October 26, 2022

CONTACT:

Vonda Tracey
Deputy District Attorney
Insurance Fraud Unit
(408) 792-2580

San Jose Father and Son Charged in $4 Million Workers’ Comp Scheme

A San Jose father and son have been charged with a $4 million scheme to avoid paying workers’ compensation insurance premiums.

Edgardo Cabrales Sr., 61, and his son, Edgar Cabrales Jr., 36, are charged with five felony counts each of insurance fraud. The son was arraigned this week. His father is scheduled to be arraigned in December. Both face potential prison, fines, and restitution.

“Workers’ Comp insurance is money that is used to help injured employees get medical care and stay financially afloat while they recover,” District Attorney Jeff Rosen said. "People who illegally avoid paying proper premiums are cheating the insurance companies, their workers, and every business that plays by the rules.”

The Cabrales own two commercial cleaning companies in San Jose: Pine Building Maintenance (PBM) and Network Facility Management (NFM). An investigation by the California Department of Insurance began in 2019 after the State Compensation Insurance Fraud fund (SCIF) suspected the businesses of fraud. The investigation discovered that since 2016 the Cabrales had only secured insurance coverage for some of their PBM employees and they had never secured a workers’ compensation insurance policy to insure their NFM employees, even though most of their business was operated through NFM.

The father and son accomplices failed to report wages to SCIF to save money on insurance, resulting in $4.2 million in lost premiums. Employers are required to maintain workers’ compensation insurance to cover their employees in the event of an accidental on-the-job injury.

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