OREANDA-NEWS. May 04, 2016. The operators of a Long Beach trucking company have been charged with workers’ compensation fraud totaling \\$1.6 million — among multiple felony counts — after being arrested by California Department of Insurance detectives.

Alvin Shen Chen and Fiona Xilin Chen, from La Canada Flintridge, are accused of attempting to reduce their workers’ compensation premiums by providing fraudulent information to their insurer, specifically regarding the number of company employees and the work they performed, according to the CDI.

CDI detectives allege the Chens paid cash to employee truck drivers in order to avoid reporting them to the insurer and to reduce payroll tax obligations. Audits show they allegedly underreported payroll by more than \\$4.7 million and in so doing cheated the State Compensation Insurance Fund out of more than \\$1.6 million in workers’ compensation premiums.

“Employers that cheat the system through premium fraud and tax evasion create an illegal marketplace advantage that costs California’s economy billions,” Insurance Commissioner Dave Jones said in a statement. “We are putting a concerted effort into curbing the underground economy and leveling the playing field for California’s honest business owners.”

In 2015, the CDI, as part of the Los Angeles County Premium Fraud Task Force, filed a similar case the CDI said is still pending. The CDI charged officers of two Vernon, California-based sewing companies subcontracted by a women’s designer jeans manufacturer with 18 felony counts of workers’ compensation insurance fraud totaling more than \\$11 million in losses. CDI detectives alleged the officers of Meriko Inc. and SF Apparel, Inc., conspired with their certified public accountant to under-report \\$78.5 million in payroll to multiple insurers (Best’s News Service, April 17, 2015).

The top five writers of workers’ compensation insurance in California during 2014 were the State Compensation Insurance Fund of California, with a 13.39% market share; Berkshire Hathaway Insurance Group, with 9.95%; Travelers Group, with 6.20%; AmTrust Group, with 5.94% and Hartford Insurance Group, with 5.45%, according to BestLink.