A brother and sister have been sentenced after pleading no contest to charges involving workers’ compensation fraud and tax evasion.
The Sacramento County District Attorney’s Office announced Thursday that Michael George Mello Jr., 37, pleaded no contest to felony workers’ compensation insurance fraud and felony tax evasion. His sister, Mary Catherine Rodriguez, 38, pleaded no contest to misdemeanor tax evasion.
Between July 2010 and July 2013, the defendants made false statements in their workers’ compensation insurance applications and policies by significantly under-reporting the number of employees and payroll in their business, Green Valley Landscaping Service, according to a District Attorney’s Office news release. They also failed to take required deductions from their employees’ pay and did not make required contributions to the unemployment insurance fund. As a result, authorities said, they cheated their workers’ compensation insurance carriers by $144,672 in premiums and the Employment Development Department by $110,462.
Mello was sentenced to 30 days in county jail and five years probation. He also was ordered to pay $144,672 in restitution to the insurance companies and $110,462 to the Employment Development Department.
Rodriguez was sentenced to three years probation and ordered to perform 50 hours of community service. She also was ordered to pay the Employment Development Department $110,462 in restitution jointly with her brother.
Employers who reduce their workers’ compensation insurance premiums by under-reporting the number of employees and payroll, and who fail to pay required payroll taxes obtain an unfair competitive advantage over other companies, prosecutors said.
The case was investigated by the California Department of Insurance’s Fraud Division, the Employment Development Department and the Department of Industrial Relations.