A California agriculture company owner and his daughter were arraigned Sept. 14 on multiple felony counts of insurance fraud for an alleged $2.5 million workers’ comp scheme.
Felipe Saurez Barocio, owner of Agriculture Services Inc., and his daughter, Angelita Barocio-Negrete, allegedly underreported employee payroll by $11 million to reduce the company’s premium for workers’ comp insurance.
California’s State Compensation Insurance Fund (SCIF) filed a suspected fraudulent claim Oct. 14, 2019, with the state’s Department of Insurance regarding alleged fraud by Agriculture Services.
A Department of Insurance investigation revealed that between 2015 and 2019, Barocio and his daugher, who was the company’s office manager, allegedly provided SCIF with false quarterly employee payroll reports.
Investigators found $11 million in payroll was missing when they compared the quarterly reports submitted to SCIF to quarterly reports submitted to the Employment Development Department.
This resulted in a total loss of $2,582,142 in insurance premiums.
Barocio and Barocio-Negrete are due to return to court on Oct. 27 for further proceedings.
Based on estimates by the National Insurance Crime Bureau (NICB), workers’ compensation fraud is a $30 billion problem annually in the United States.
In California, it is estimated that workers’ compensation fraud costs the state between $1 billion to $3 billion per year.