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Businessmen convicted of worker's comp. fraud

Recently, the owners of a security company that employed over 2,700 people throughout California were convicted for worker's compensation fraud. The president of International Protective Services Inc., who was also a reserve L.A. County Sheriff's Deputy, was convicted of insurance fraud and grand theft. He was also convicted of illegally possessing assault rifles. The company's vice president was convicted of failing to file tax returns as well as a weapons violation. The pair allegedly tried to hide the number of their employees by creating a shell company in order to get out of paying worker's compensation premiums to the State of Californias. The alleged fraud cost the state $10.1 million in lost premiums.

Worker's compensation fraud is a problem that interferes with the right of injured workers to receive compensation from the state. Employers who avoid paying premiums using schemes such as the one in this case are cheating their employees as well as all the honest employers who pay higher premiums as a result.

This kind of employer attitude is all the more egregious when one considers the wide variety of workplace accidents that can injure workers. Toxic chemicals such as asbestos and benzene can cause illnesses, while construction accidents can cause severe injuries to workers. Injuries can occur due to repetitive motions that workers go through in certain industries.

Because of the dangers of some occupations, worker's compensation is an essential right of workers. Fortunately, any worker injured on the job is entitled to recover worker's compensation for any temporary or permanent disability incurred, as well as for medical treatment benefits, and for death benefits for the families of workers killed on the job. For all workplace injuries, there is an appropriate financial compensation.

Source:, "Ousama Karawia: Former security company owner convicted in Workers' Comp Fraud," December 13, 2012.

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Businessmen convicted of worker's comp. fraud | Rose, Klein & Marias, LLP