Workers’ compensation insurance fraud task force discovers nearly $30 million scheme in Kings County
News: 2024 Press Release
FRESNO, Calif. — Ruben Perez Mireles Jr., 49, of Clovis, and his business associate, John Mena, 29, of Lemoore, were arraigned yesterday on multiple felony counts including insurance fraud, grand theft, and tax fraud after a task force investigation led by the California Department of Insurance found they allegedly underreported over $29.2 million in payroll for multiple businesses to illegally save on workers’ compensation insurance premium and taxes.
Mireles and Mena operated two Kings County farm labor contracting companies, Vista Pacific Labor Solutions, Inc. and Calzona Ag Management, Inc. The investigation by the Central Valley Workers’ Compensation Fraud Task Force found that Mireles, owner of Vista Pacific Labor Solutions, Inc, underreported $7.6 million in employee payroll to his workers’ compensation insurance carrier for the period of September 2019 through August 2020. This underreporting resulted in a premium loss of $1.7 million.
The investigation revealed Mireles then created another farm labor contracting company, Calzona Ag Management, Inc. Mireles recruited Mena and together they shifted payroll to this new company to avoid an increased assessment of the business’ workplace safety, which would have more than doubled the insurance premium. Together, they underreported $8.8 million in employee payroll for the period of December 2019 through December 2021, resulting in an additional premium loss of $1.8 million.
“When business owners illegally underreport payroll, they are hurting legitimate businesses and California consumers who pay the price through higher insurance premiums,” said Insurance Commissioner Ricardo Lara. “Exposing fraud is critical to protect workers and businesses. Thanks to the work of my Department detectives and the Central Valley Workers’ Compensation Fraud Task Force these business owners are being held accountable for their actions.”
Additionally, the task force investigation found Mireles underreported $12.8 million in employee payroll to the Employment Development Department and failed to report personal income to the Franchise Tax Board. This underreporting resulted in a combined loss of approximately $3 million for unpaid tax liability, penalties, and interest. Mireles and Mena’s fraud scheme defrauded their insurance carries, EDD, and FTB out of over $6.5 million.
“EDD investigators are proud to work alongside our partners in this task force in a unified front against the underground economy,” said EDD Director Nancy Faris. “It’s important to create a level playing field for businesses and to protect workers, ensuring they get the wages and benefits they are entitled to receive.”
Investigators also discovered that Mireles fraudulently obtained a COVID-19 Paycheck Protection Program loan. After an investigation led by the FBI, Mireles pleaded guilty and was sentenced to one year in prison. Mireles is also in court today on additional felony charges for his role in an earlier workers’ compensation insurance fraud scheme, also uncovered by the task force.
Mireles has been charged with eight felony counts including workers’ compensation insurance fraud, grand theft, unemployment insurance fraud, and tax fraud. Mena has been charged with three felony counts of workers’ compensation insurance fraud and one felony count of grand theft.
The Central Valley Workers’ Compensation Fraud Task Force is an inter-agency anti-fraud partnership with members from the California Department of Insurance, the California Employment Development Department, the California Franchise Tax Board, the Kings County District Attorney’s Office, the Fresno County District Attorney’s Office, the Kern County District Attorney’s Office, the Madera County District Attorney’s Office, the Merced County District Attorney’s Office, the San Luis Obispo County District Attorney’s Office, and the Tulare County District Attorney’s Office.
The case is being prosecuted by Kings County District Attorney Sarah Hacker.
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Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.
