Two owners of Sacramento flooring contractor Apex charged in felony workers’ comp fraud
Two owners of Sacramento flooring contractor Apex Industry Solutions face three felony counts of workers’ compensation fraud after California insurance regulators alleged that they under-reported payroll and employees, Insurance Commissioner Ricardo Lara announced Friday.
Penryn resident Curtis Davis, 53, and 45-year-old Ryan Black, formerly of Fair Oaks, failed to tell their workers’ comp insurers about $30 million in wages paid to employees as part of a scheme to illegally save on Apex insurance premiums, insurance regulators alleged, and this resulted in a loss of roughly $3.8 million to three insurers.
The Sacramento County District Attorney’s Office is prosecuting the case on behalf of the state insurance department and arraigned Black, now a resident of Cleveland, Tenn., on Wednesday and Davis on May 5.
Lara stated in the Friday news release that one of Apex’s insurance carriers discovered in October 2017 that two individuals working for Apex were installing floors without a license and were receiving 1099 forms as independent contractors rather than W-2 forms as employees. However, Black identified those two workers as well as two others as company employees.
In April 2018, an Apex insurance carrier filed a report of suspected fraud, the news release from Lara’s Office noted, and a subsequent Department of Insurance investigation showed that, although the company had a large number of employees, the Apex payroll reported to its carrier was minimal.
Insurance regulators then looked back and found the company also had conspired to under-report payroll to two prior carriers, the insurance commissioner stated, and the alleged fraud takes into account a five-year period from 2013-2018 that affected all three carriers.
Earlier this month, Lara announced that insurance investigators had successfully won a case against a Maxwell rice mill worker accused of committing workers’ compensation fraud.
