3 South Bay business owners to be sentenced in separate workers' comp fraud cases
Three people will be sentenced after pleading guilty in two separate workers compensation fraud cases, the Santa Clara District Attorney's Office announced Monday.
Both cases involve business owners failing to properly maintain mandatory workers compensation insurance, which covers business should employees suffer an on-the-job injury.
Mark Anthony Ramos, the owner of two companies providing pediatric therapy in the Bay Area, will receive three years in federal prison, the DA's office said. However, his sentence will be suspended to six months in county jail upon paying restitution.
Edgar Cabrales Sr. and Edgar Cabrales Jr. will be sentenced to a decade of probation after pleading guilty for committing workers compensation fraud at their San Jose cleaning business.
"If you don't pay to protect your employees, you will pay in a far more serious way," District Attorney Jeff Rosen said. "People who illegally avoid paying proper premiums are cheating the insurance companies, their workers, and every business that plays by the rules."
For nearly seven years, Ramos, 50, ran an insurance fraud scheme in which he severely underreported his payroll to insurance carriers, according to the district attorney's office. His plan was foiled, however, when an employee accidentally sent the correct bill to the insurance company, revealing a discrepancy in what Ramos initially reported.
Prosecutors said that when he was confronted, Ramos exclaimed, "How'd the hell did you get that bill!"
The Cabraleses have already served 18 months in a county jail alternative program and paid more than $1 million for their scheme, the DA's office said. The Cabraleses owned two commercial cleaning business in San Jose, but beginning in 2016, they only obtained workers compensation insurance for one of them. This resulted in $4.2 million in lost premiums, according to the district attorney's office.
Representatives for both Ramos and the Cabraleses were not immediately available for comment.