For release on April 20, 2012   CONTACT PERSON: Christopher Kwok, Deputy District Attorney Insurance Fraud Unit Economic Crimes Group (408) 792-2916                                               OPERATOR OF BK PAINTING, INC. IS CHARGED WITH WORKERS’ COMPENSATION INSURANCE PREMIUM FRAUD   An investigation by the Santa Clara County District Attorney’s Office exposed a major insurance fraud scheme in Santa Clara County. Bill Won Yi, 42, of Campbell, has been charged with felony workers’ compensation insurance premium fraud. Arrested on April 12, 2012, Yi’s illegal scheme caused an estimated loss of more than $200,000 to the workers’ compensation insurance carrier.       Yi will be arraigned on April 26. If convicted of the charge, the defendant faces a maximum of five years in jail and would be ordered to pay full restitution.   This common and hard to discover fraud involves businesses misrepresenting their true payroll to an insurance company in order to purchase workers’ compensation insurance at a lower premium.    “This type of fraud scheme puts workers at risk of having insufficient or no insurance coverage if they are injured on the job,” said Deputy District Attorney Christopher Kwok. “Furthermore, it illegally lowers operating costs for offending businesses, thereby giving them an unfair competitive advantage over law abiding businesses.”   It is alleged that between 2004 and 2010, the defendant misrepresented his Mountain View company’s safety record and grossly underreported its payroll by hiring unlicensed contractors and paying some employees’ wages in cash. This dramatically and fraudulently reduced his workers’ compensation insurance premium.      To protect workers, California law requires all businesses with employees to maintain workers’ compensation insurance. The insurance premium is based on a number of factors including the nature of the business, safety record and the employees’ wages as reported by the employer.  

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