On May 16, 2024, the Fresno Bee reported that California regulators were accusing a business owner in Fresno of workers’ compensation fraud. Heigo Kubar—the former owner of a Fresno-based trucking company—is facing allegations that he underreported company payroll by approximately $2 million. Mr. Kubar is facing three felony criminal counts. He had pleaded not guilty to the offense. Within this blog post, our Fresno workers’ compensation defense lawyer discusses the allegations raised in this case in more detail.
Allegations: Fresno Employers Defrauded Workers’ Compensation by Underreporting Payroll
As reported by the Fresno Bee, Heigo Kubar, the 84-year-old former owner of Fresno-based TKJ Trucking, has been charged with three felony criminal offenses for allegedly underreporting payroll to improperly avoid paying the required workers’ compensation premiums. The California Department of Insurance (DIR) contends that the violative conduct occurred between December 2018 to December 2021. Mr. Kubar and TKJ Trucking reported a total payroll during this period of slightly less than $1 million. The DIR contends that the actual payroll was over $3 million. Notably, the issue came to light after an employee passed away. Mr. Kubar has pleaded not guilty to the offense. The next hearing is scheduled to take place in a Fresno County court in August 2024.
Business Owners Must Accurately Report Number of Workers and Total Payroll
California state law requires all employers to obtain no-fault insurance coverage for their workforce. Workers’ compensation premiums are based, in large part, on a company’s payroll. For this reason, business owners in California are legally required to accurately report the number of workers employed and their total payroll. Doing so ensures proper calculation of taxes, workers’ compensation insurance premiums, and other benefits, which are based on payroll figures. Misreporting these figures can lead to severe penalties, including fines and criminal charges for workers’ compensation fraud.
Workers’ Compensation Fraud is a Civil and Criminal Offense in California
California regulators have referred to workers’ compensation fraud as a billion-dollar problem. Given the scope of the issue, a tremendous number of resources have been put into combatting workers’ compensation fraud. Notably, a business owner who defrauded the state’s workers’ compensation system—whether through the underreporting of payroll or through any other type of improper action—can be held liable for both civil penalties and criminal penalties. More specifically, a business owner who knowingly underreported payroll may face liability for:
- Civil: Significant financial penalties, including payment of full restitution for the workers’ compensation premiums that should have been paid.
- Criminal: Serious felony criminal charges that carry the potential for significant state prison time.
Get Help From a Workers’ Compensation Defense Attorney in Fresno, California
At Yrulegui & Roberts, our Fresno workers’ compensation defense law firm has the specialized expertise you can trust. We are proud to represent employers, insurance companies, and claims administrators. Call us now or contact us online for a strictly confidential appointment. From our Fresno law office, we provide workers’ compensation defense services throughout the San Joaquin Valley.
