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| | Drywall Contractor Ordered to Pay $1 Million to Workers' Compensation Insurer For Misclassification
By Barry Zalma, CFE, Attorney At Law - May 1, 2015
Shawn A. Campbell, the owner of a former Washington state drywall contracting firm has been ordered to pay $1 million in delinquent workers' compensation premiums and penalties after a state insurance board found that he misclassified his employees as co-owners to avoid paying premiums, according to the state Department of Labor and Industries.
The Washington State Board of Industrial Insurance Appeals ruled in January 2015 that Walla Walla, Washington-based E & E Acoustics L.L.C. underreported employee hours for drywall jobs that the firm performed between April 2007 and June 2009, allowing the firm to reduce the amount of payroll used to determine its workers' comp premiums, the state labor department said. Additionally, the board found that company owner Campbell sometimes listed employees as co-owners in order to exempt E&E Acoustics from paying workers' comp premiums for those workers, the labor department said.
Campbell and his wife were ordered by the industrial appeals board to personally repay $615,000 in premiums, $102,000 in late penalties and $296,000 in interest as of mid-March. Money recovered in the case will be paid to the state workers' comp fund.
Campbell has appealed the industrial board’s ruling to the Walla Walla County, Washington, Superior Court, according to the labor department. The department said that Campbell failed to list any company officers in filings he submitted in 2011 to the Washington state Secretary of State, prompting the department to “administratively dissolve” the business.
zalma@zalma.com
Barry Zalma is an attorney, a CFE (Certified Fraud Examiner), and an expert witness for myriad types of insurance fraud. His website is at www.zalma.com. To read his blog, go to www.zalma.com/blog.
copyright © Barry Zalma; published with permission by adjustercom.
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