A Sacramento County couple were convicted of fraud stemming from unlawful business practices and tax evasion in their Folsom-based cleaning business, Johnny Sparkles Cleaning Services Inc., the El Dorado District Attorney's office announced this week.
John and Theresa Kipilo, owners of the business, were convicted in El Dorado Superior Court of multiple counts of felony worker's compensation fraud and tax evasion.
Johnny Sparkles cleaned houses in El Dorado, Sacramento and Placer counties, but the majority of their clients lived in El Dorado Hills, said Michael McCoy, deputy district attorney.
From 2014 to 2017, the Kipilo couple under-reported the number of employees on their payroll and misclassified their positions to four insurance carriers to get lower insurance premiums, McCoy said. The couple dodged nearly $100,000 of unpaid insurance premiums, the DA's Office said. They also didn't pay more than $40,000 of payroll taxes, the DA said.
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They are now required to pay back $124,610 in restitution to the insurance companies. The Kipilos were also placed on supervised probation for four years.
Johnny Sparkles was investigated by a five-county task force looking into worker's compensation fraud. The investigation was funded by the California Department of Insurance.