Tar and Feather


Punishment by tar and feathers was once used as an unofficial way to enforce justice. Thankfully, our current justice system doesn’t use that form of punishment to discipline those who break the law today. However, the owner of a California paving company got tarred with his own brush while attempting to avoid paying workers’ compensation benefits to a legitimately injured employee. (Fortunately, no feathers were plucked, nor any birds harmed during the case.)

An employee of the paving company reported an injury while working a job at a local university campus. As a result, he filed for workers’ compensation. The owner of the company denied that the worker was employed by the company. (That’s a real slap in the face.)An investigation ensued and it was determined that the employee’s claim was legitimate. Investigators also found some other interesting information that led them to believe there was criminal conduct by the owner and his company.

The paving company owner pleaded guilty to one count each of tax fraud, workers’ compensation fraud, supplying false or fraudulent payroll documents and violating a section of the California Labor Code. (Right at home in creating a hot mess.)When he is sentenced he is expected to serve one year in county jail. In addition, the judge most likely will order him to repay a total of $165,000 to the Employment Development Department, the Franchise Tax Board, the State Compensation Insurance Fund and a small business workers’ compensation insurance company.

Employers are required to purchase insurance that benefits employees who incur work-related injuries. This is a win-win for both employers and employees. Employees get benefits no matter who is at fault and employers are protected from potential lawsuits from disgruntled employees. This paving company owner did everything he could do to shirk his duties as a responsible employer, but in the end he was stuck. (How apropos.)

Source: Today’s ”Fraud of the Day” is based on an article, ”Paving Company Owner Pleads Guilty to Fraud,” published by the Santa Barbara Independent on July 22, 2016.

Pleading guilty to one count each of tax fraud, workers’ compensation fraud, supplying false or fraudulent payroll documents, and a violation of Labor Code Section 1779, Alberto Rodriguez, owner of United Seal Coating and Slurry Seal, is expected to be sentenced to one year in county jail next January. The case began when one of United Seal Coating’s workers at a job on the UCSB campus was injured and filed for workers’ comp. Rodriguez denied the worker was his employee, and the subsequent investigation, which originated in September 2013, not only proved the worker was his but also led investigators to other criminal conduct by Rodriguez and his business.

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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.