The owners and other individuals associated with two California construction companies were charged for conspiring to misclassify workers in a workers’ compensation fraud scheme.
In two separate cases stemming from the same investigation, the owners and other individuals were arraigned March 8, 2023, for schemes involving worker misclassification to avoid paying workers’ compensation insurance premiums and payroll taxes.
The investigation into the two companies was conducted by the Conta Costa District Attorney’s Office, Contractor’s State Licensing Board and the California Department of Insurance.
The first case involved a complaint against Candido Silva, Itamar De Morais Jr. and Irma Ruiz Alarcon of Atlas Pavers who were accused of unlawfully paying more than $12 million to the company’s “unlicensed and misclassified construction crews” from 2016 through 2019. Silva, De Morais Jr. and Alarcon also allegedly discussed a desire to avoid insurance with the California State Compensation Insurance Fund (SCIF) “because they knew that SCIF would require an audit of the company’s books.”
Christopher Vieira and Gilbert Guiotti of Centrox Construction were charged in a separate complaint for operating as a shell company to “route unlawful payments to unlicensed subcontractors for Atlas Pavers and others.” Vieira and Guiotti were charged with unlawful use of their Contractors’ State Licensing Board license to “aid and abet payments from companies advertising to consumers as licensed contractors to their unlicensed and misclassified subcontractor labor crews.”
Centrox is also accused of receiving a percentage for routing millions of dollars in payroll funds to unlicensed and misclassified subcontractor crews while fraudulently underreporting the total payroll amounts to SCIF.
