LOS ANGELES/SAN FRANCISCO – Los Angeles Superior Court Judge David Horwitz ordered Rogelio Mata, owner of Rogma Construction Services, to pay full restitution to State Fund of $100,000 after pleading no contest to one count of Insurance Code Section 11880 - insurance premium fraud. Judge Horwitz also sentenced Mata to three days in county jail.

Mr. Mata operated Rogma Construction Services out of his Los Angeles home, and represented his company to State Fund – a workers’ compensation insurance carrier – as a construction clean-up service rather than a construction demolition company. Construction demolition requires more expensive category for workers’ compensation premiums. Rogma Construction Services had 15 to 20 employees, and while Mata reported the correct total payroll to State Fund, he reported it in a lesser-rate class code in order to pay less for his premiums.

The fraud was discovered after State Fund received a tip. State Fund’s Los Angeles District Office fraud liaison then conducted a detailed investigation of Rogma’s business records which included a review of over a dozen holders of certificates of workers’ compensation and found all had interior demolition work done by Rogma.

In addition, State Fund’s Fraud Investigation Program found that Rogma Construction Services had taken part in the television show, “Extreme Make Over, Home Edition” as an interior demolition contractor. Rogma Construction’s Web site also listed the interior demolition services it performed.

State Fund’s Fraud Investigation Program submitted its suspected fraud case to the Department of Insurance and the Los Angeles District Attorney's Office for their review. Charges were filed against Mata in September 2006 by the DA’s Office. Mata was originally charged with four counts of workers’ compensation insurance premium fraud.

“Misclassification is a serious problem within the construction industry,” said prosecuting attorney Michael O’Gara of the Los Angeles District Attorney’s Office, “I am happy with the outcome. Hopefully others will get the message that they will be prosecuted if they engage in insurance fraud.”

“This case shows how far some employers will go to avoid paying proper workers’ compensation premiums and jeopardize their employees’ safety,” said Darlyn Regan, who manages State Fund's Fraud Investigation Program (FIP). “We will continue to work closely with the Los Angeles District Attorney’s Office to combat fraud.”

Mata had been insured with State Fund from 1985 to 2005.

State Fund’s Fraud Investigation Program (FIP) addresses all aspects of workers’ compensation insurance fraud, including employee, employer, medical, and legal. In the last decade, State Fund’s FIP has produced hundreds of arrests and convictions in a wide range of workers’ compensation cases, including some considered milestones in California’s fight against fraud.

EDITOR'S NOTE: Established by the California Legislature in 1914, State Compensation Insurance Fund is a nonprofit, and wholly self-supporting public enterprise carrier that provides workers’ compensation coverage to all California employers.