Something Fowl in The Golden State

High Angle View Of A Person With Fractured Hand Filling Health Insurance Form

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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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.