News: 2009 Press Release
For Release: October 29, 2009
Media Calls Only: 916-492-3566
Insurance Commissioner Poizner Announces Guilty Pleas in Orange County Workers' Comp Fraud Cases Totalling $6.7 Million
Insurance Commissioner Steve Poizner today announced Sanjiv Mahendra Shah, 53, of Placentia and Abu M. Hossain, 59, of Chino Hills have pled guilty to 13 counts of fraud and one count of conspiracy in a workers' compensation insurance fraud case that began in 2005 and resulted in their arrests Oct. 15, when they surrendered at the Orange County Superior Court Central Justice Center.
"Whether it's the State's fund or a private insurer, fraud costs all of us dearly," said Commissioner Poizner. "Our department and its dedicated investigators will not rest in bringing these criminals to justice. I want to make it clear - if you commit these types of crimes, we will find you and prosecute you."
As part of the plea agreement, Shah and Hossain have agreed to pay $380,126 in restitution to the State Compensation Insurance Fund and Fireman's Fund. Each will serve 120 days in jail, serve three years probation and pay an undetermined amount of fines. Sentencing is Jan. 26, 2010.
Shah owns Sonic Foods and United Pizza. Hossain was Shah's bookkeeper. From 2005 to 2008 it was alleged that Shah, with Hossain's help, underreported employee payroll by $6.71 million to lower his workers' compensation insurance premiums to the State Compensation Insurance Fund and later the Fireman's Fund. Combined, the premium losses to State Fund and Fireman's Fund over the three-year period totaled $375,553.
The fraudulent activity was discovered by State Fund in May 2006 and forwarded to the California Department of Insurance and Orange County District Attorney's Office for investigation.
A complaint was filed by the Orange County District Attorney on Oct. 15, 2009 and was based on an investigation conducted by the Orange County Premium Fraud Task Force consisting of detectives from CDI's Fraud Division and investigators from the Orange County District Attorney's Office, Employment Development Department and California Franchise Tax Board. Investigators from State Fund and Fireman's Fund's Special Investigations Units assisted with the investigation.
Commissioner Poizner oversees 16 CDI Enforcement Branch regional offices throughout the state. Approximately 1,900 insurance fraud-related arrests have been made by the Department of Insurance's enforcement division since Commissioner Poizner took office in 2007 - more arrests than have been made during any other two year period, under any previous insurance commissioner.
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