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Something Fowl in The Golden State

WorkersCompensation-WorkersDisability-13
Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

Between 2015 and 2021, Wei Wen Wu, 54, and Feng Wen Lam, 49, of Arcadia, California, underreported $4.4 million in employee payroll for Golden Food Inc., their poultry processing business located in El Monte. By underreporting payroll, Golden Food Inc.’s (GFI) workers’ compensation insurance premium was reduced, ultimately causing a loss of $1.6 million in unpaid insurance premiums across four insurers.

An investigation was launched by the California Department of Insurance after receiving a referral from the State Compensation Insurance Fund, which suspected the business of fraud after comparing the company’s payroll during annual audits with the payroll reported to the Employment Development Department. (You could say that the chicken parts didn’t add up.)

Investigators also found that Wu was forcing employees to work through breaks after they had clocked out. He did not pay them overtime, but falsified pay stubs, and deducted work hours from employees to convert pay to bonuses. (Converting pay to bonuses? What, do they have a pro sports-like salary cap?) Lam and Wu failed to pay $437,542 in labor to their 34 employees.

Wu and Lam face 43 felony counts of insurance fraud, grand theft, and conspiracy and are to be prosecuted by L.A. County District Attorney’s Office’s Healthcare Fraud Division. (If Wu and Lam had a wish bone between them, neither one would get their wish. It looks like both are going to be stuck without any luck.)

Today’s Fraud of the Day comes from an article by the Insurance Journal, “California Business Owner Couple Nabbed in $4.5M Workers’ Comp Fraud Scheme,” dated January 28, 2022.

Wei Wen Wu, 54, and Feng Wen Lam, 49, both of Arcadia, California, were charged with 43 felony counts of insurance fraud, grand theft, and conspiracy after allegedly underreporting nearly $4.5 million in employee payroll.

The scheme reportedly fraudulently reduced their company’s workers’ comp insurance premium resulting in a loss of $1.7 million in unpaid insurance premiums.

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