SAN RAFAEL/SAN FRANCISCO - State Compensation Insurance Fund has received $566,480 in restitution from a Marin County roofing company owner convicted of workers’ compensation fraud. Kenneth Scott Cooper, 51, of San Rafael, made full restitution to State Fund after pleading guilty on November 1, 2005 to three felony charges:  (Count 1) Worker’s Compensation Insurance Premium Fraud; (Count 2) Furnishing a False Payroll Deduction Statement and (Count 3) Filing a False Tax Return.

An 18-month multi-agency state investigation found that Cooper, a licensed general contractor, failed to accurately report employee payroll at Ken Cooper Roofing and Gutter Systems of Marin County from 1999-2003. Participating in the investigation were State Fund, the California Department of Insurance (CDI), the Franchise Tax Board (FTB), the Employment Development Department (EDD) and the Marin County District Attorney's Office.

“This case underscores State Fund’s ongoing commitment to investigate and fight all types of fraud, which robs California's employers and our economy of millions of dollars each year.” said Donna Gallagher, who manages State Fund's Fraud Investigation Program (FIP).

The fraud was originally uncovered when one of Cooper's employees fell off a roof. The injured worker filed a workers’ compensation claim and revealed that Cooper’s company had been paying him in cash approximately 50 percent of the time, which led to the lower temporary-disability payment.

A multi-agency audit was conducted of Cooper business records which revealed that Cooper underreported and misreported employee payroll in order to lower his insurance premiums. Specifically, Cooper’s scheme involved paying more than 50 percent of his payroll in cash in order to underreport his total employee payroll; reporting inflated hourly wages for some employees and, not identifying some of his employee payroll as “roofer wages” to avoid roofer-related premiums which are greater than premiums for other, lower-risk occupations.

State Fund investigators referred the case to the Marin County District Attorney’s Office which filed charges against Cooper on May 10, 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.

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EDITOR'S NOTE: Established by the California Legislature in 1914, State Compensation Insurance Fund guarantees the availability of workers' compensation coverage at cost to all California employers and competes fairly with private carriers. State Fund is a wholly self-supporting non-profit enterprise that serves as a moderating and stabilizing influence on California's workers' compensation insurance system.