A brother and sister who owned and operated two California farm labor businesses were sentenced to three years in prison for workers’ compensation fraud.
However, a judge suspended the prison sentences for Elias Perez Jr. and Alejandra Perez, instead placing each of them on seven years of felony probation for workers’ compensation insurance fraud committed between 2013 and 2017.
Both of them pleaded guilty to two counts of insurance fraud on June 29, 2023, according to the King City Rustler.
Probation involves 210 days in county jail and payment of restitution totaling $633,786. If they violate the probation terms in a way that affects the health or safety of employees, their farm labor contractor licenses could be revoked.
Businesses were initially target of federal investigation
The Perez siblings were corporate officers for Future Ag. Management Inc. and Future Harvester and Packers Inc. The two companies have employed as many as 1,500 farmworkers at any one time.
Both businesses were the target of federal and state investigations for wage and hour violations committed between 2014 and 2016, resulting in fines and compliance agreements.
Injured workers denied benefits, referred to unlicensed physicians
In July 2016, the criminal case began when “an injured worker complained that her supervisor refused to take her to a doctor and forced her to be treated by an unlicensed healthcare worker.” This led the California Department of Insurance to investigate the Perez siblings workers’ compensation insurance policies and bank records.
The forensic audit revealed that both businesses provided their insurance companies with false payroll reports to get reduced premiums. Investigators found that the payrolls were underreported for 2013 and 2017 by $17,397,790.
The investigation also revealed that Elias Perez Jr. instructed a supervisor to deny access to workers’ compensation benefits for at least three injured employees.
More felonies uncovered as DA filed fraud charges
In Nov. 2020, the Monterey County District Attorney filed felony fraud charges against the siblings while investigators continued to uncover evidence of more felony acts committed by the brother and sister.
For example, investigators found that the Perez siblings submitted falsified paychecks to the U.S. Department of Labor during the 2015 investigation into the wage and hour violations. This resulted in additional felony charges.
