Christopher Kwok, Deputy District Attorney
Insurance Fraud Unit
Economic Crimes Group
For release on December 5, 2011
OPERATOR OF ACE BUILDING MAINTENANCE INC., MAIDS @ WORK,AND NORCAL SERVICES GROUP INC. CHARGED WITH OVER $1 MILLION IN WORKERS’ COMPENSATION INSURANCE FRAUD
An investigation by the Santa Clara County District Attorney’s Office exposed a major insurance fraud scheme in Santa Clara County. Robert Francis Gale, 59, of Granite Bay, has been charged with 4 felonies involving workers’ compensation insurance fraud. He was arrested on November 18, 2011. The alleged illegal actions caused an estimated total loss of over $1 million to the workers’ compensation insurance carriers.
The defendant owns and operates Ace Building Maintenance Inc., Norcal Services Group Inc., and Maids @ Home. They provide office and house cleaning services throughout Santa Clara Valley.
To protect workers, California law requires all businesses with employees to maintain workers’ compensation insurance. The insurance premium is assessed based on a number of factors including the nature of the business, safety record, and the employees’ wages as reported by the employer. It is alleged that between 2002 and 2010, the defendant misrepresented the nature of the companies’ operation and their safety record to the insurance carriers, and grossly underreported the employees’ wages in order to fraudulently reduce workers’ compensation insurance premium.
This type of fraud scheme puts workers at risk of having insufficient or no insurance coverage if they are injured on the job. Furthermore, it illegally lowers operating costs for offending businesses, thereby giving them an unfair competitive advantage over law abiding businesses.
If convicted of all counts, the defendant faces a maximum of 15 years of state prison and would be ordered to pay full restitution.