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| | Owner Of California Statewide Janitorial Business, Gina Marie Gregori, Arrested For 32 Million Dollar Workers' Compensation Premium Fraud By Lonce LaMon - June 2, 2017
The California Department of Insurance announced yesterday that their detectives arrested Gina Marie Gregori, 55, of Lafayette, for allegedly underreporting payroll and robbing insurers to the tune of $32 million.
Gregori was charged with 19 felony counts and is being held on $5,235,000 bail at the San Francisco County Jail.
According to the detectives, over a seven-year period Gregori, owner of GMG Janitorial, GMG Billings, and Apex Janitorial Solutions, allegedly falsified documents and underreported payroll to her workers' compensation insurance carrier. The department's investigation revealed Gregori kept two sets of books, using a payroll processing service to report to Employment Development Department and pay her employees, and keeping a fraudulent set of books that she provided to insurers and insurance auditors, which showed a significantly lower payroll amount.
GMG is a large janitorial company operating throughout the Bay area and Southern California, employing more than 200 employees from July 2009 through December 2016.
GMG and the other entities had been insured by State Comp, a work comp carrier and quasi-state agency that faithfully cross-references payroll reported to them with payroll reported to EDD. This is the same scam committed by Sung Hyug Kim and Caroline Sung Choi, the designer jeans manufacturers who were sentenced in downtown L.A. in March of this year for lying to their multiple insurers by giving them different numbers than they gave to the California Employment Development Department. It’s guaranteed that any fraudster company will get caught by doing this, as insurers ask for the EDD Forms DE-9 and 9C at the audit and cross reference the numbers.
It goes back to what Barry Zalma, CFE and renowned insurance fraud expert wrote in his newsletter, “The quality of insurance fraud perpetrators is almost non-existent.”
"People often make the mistake of thinking insurance fraud is a victimless crime--it is not," said Insurance Commissioner Dave Jones.
The San Francisco County District Attorney's Office is prosecuting the case. The charges filed are 7 felony counts of Insurance Fraud Section 11880(a), 1 felony count of Insurance Fraud Section 11760(a), 2 felony counts of Penal Code Section 487(a) grand theft, money, labor, or real or personal property taken of a value exceeding nine hundred fifty dollars ($950), 2 felony counts of Penal Code Section 186.11(a)(2), a white collar crime enhancement for fraud exceeding $500,000.00, and 4 counts of Penal Code Section 12022.6(A)(2), in the commission of a felony taking property of a value exceeding $200,000.00.
Lonce LaMon, journalist, lonce@adjustercom.com; and the California Department of Insurance. DOI news release of June 1st 2017.
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