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LOS ANGELES (AP) _ A construction contractor was arrested Wednesday for allegedly defrauding employees and the state workers compensation system of $710,000 by underpaying and underreporting wages.

James Chavez, 52, of Long Beach, was arrested at his company, GR Engineering, Inc., and was held on $540,000 bail, the Los Angeles County district attorney's office said. Chavez and his Signal Hill-based company were charged with insurance fraud, conspiracy to commit grand theft labor and four other felonies.

There was no immediate word on whether Chavez had an attorney. Chave'z state-licensed company worked on several federally funded projects for the county in 2002 and 2003, prosecutor Barry Gale said.

From March 2001 to June 2003, Chavez and the company allegedly failed to pay workers prevailing wages as required and underreported what they did earn to avoid higher workers compensation insurance premiums and taxes, district attorney's spokeswoman Sandi Gibbons said.