For release on January 6, 2012   CONTACT PERSON:
Katharina L. Wells, Deputy District Attorney
Insurance Fraud Unit
Economic Crimes Group
(408) 792-2530       UNLICENSED CONTRACTOR CONVICTED OF WORKERS’ COMPENSATION INSURANCE PREMIUM FRAUD AND CONTRACTING WITHOUT A LICENSE   Sergio Gayton Gonzales, Sr., 57, of San Jose, was convicted of workers’ compensation insurance premium fraud and unlawful use of a contractor’s license without permission.  The conviction was the result of an investigation initiated by the Santa Clara County District Attorney’s Office.  Gonzales falsely represented to a licensed contractor, who hired Gonzales, that he was a licensed subcontractor with workers’ compensation insurance, when, in fact, Gonzales was not a licensed contractor, as he used his son’s license number without permission, and he did not carry workers’ compensation insurance.  Gonzales’ fraudulent representations resulted in the loss of $68,000.00 in workers’ compensation insurance premium that should have been paid over the course of the construction contract to properly insure the workers on this project.    In October of 2011 Gonzales pleaded guilty to one felony count of insurance premium fraud and one felony count of fraudulent use of a contractor’s number.  On January 4, 2012, Gonzales was sentenced to 90 days county jail and three years formal probation.  Prior to sentencing, Gonzales paid $48,000.00 of the $68,000.00 owed to The State Compensation Insurance Fund.  As a condition of probation, he will be required to pay the remaining $20,000.00.   Workers’ compensation insurance premium fraud 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.   ###

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