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Sacramento DA / Media / 2015 Archives / 9.10.15: Siblings Sentenced for Workers’ Comp Fraud, Tax Evasion

Siblings Sentenced for Workers’ Comp Fraud, Tax Evasion

DATE:  September 10, 2015

CASE:  Michael George Mello Jr. & Mary Catherine Rodriguez

PROSECUTOR:  Supervising Deputy District Attorney Dale Kitching, Insurance Fraud Unit

Thirty-seven-year-old Michael George Mello Jr. pled no contest to felony workers’ compensation insurance fraud and felony tax evasion.  His sister, 38-year-old Mary Catherine Rodriguez, pled no contest to misdemeanor tax evasion.

Between July 2010 and July 2013, the defendants made false statements in their worker’s compensation insurance applications and policies by significantly underreporting the number of employees and payroll in their business, Green Valley Landscaping Services. They also failed to take required deductions from their employees’ pay and did not make required contributions to the unemployment insurance fund. In so doing, they cheated their workers’ compensation insurance carriers by $144,672 in premiums and the Employment Development Department (EDD) by $110,462.

Mello was sentenced to 30 days county jail, 5 years formal probation, and ordered to pay $144,672 in restitution to the insurance companies and $110,462 to EDD. Rodriguez was sentenced to 3 years probation, ordered to serve 50 hours of community service, and ordered to pay EDD $110,462 in restitution jointly with her brother.

Employers who reduce their workers’ compensation insurance premiums by underreporting their number of employees and payroll, and fail to pay required payroll taxes obtain an unfair competitive advantage over other companies.  Prosecutions such as this case seek to level the playing field and hold those who cheat accountable.

This case was investigated by the California Department of Insurance’s Fraud Division, the Employment Development Department, and the Department of Industrial Relations.

 

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