Four family members were charged with multiple counts of workers’ compensation fraud for underreporting payroll for two of their California agriculture businesses.
The California Department of Insurance charged the family members after finding their companies underreported payroll to illegally save more than $2.1 million in workers’ compensation insurance premiums.
This alleged fraud was discovered after a previous investigation resulted in the sentencing of a father and daughter for a similar scheme. The daughter, Angelita Barocio-Negrete, was the office manager and bookkeeper for two additional family-owned farm labor contracting businesses.
An investigation into those businesses revealed that they were also underreporting payroll to their insurance carrier.
Negrete M. Agriculture Inc., owned by Maria Negrete-Melchor and her daughter-in-law Melissa Bourbois, had a workers’ compensation insurance policy issued by State Compensation Insurance Fund from December 2007 to January 2013. Barocio-Negrete, Negrete Melchor’s daughter, was the office manager and bookkeeper at the time.
The company reported $552,517 in payroll, and a forensic audit revealed the company actually had $4,026,125 in payroll.
Negrete & Son’s Ag Inc., owned by Albaro Barocio, Barocio-Negrete’s brother, had a workers’ compensation insurance policy issued by State Compensation Insurance Fund from November 2012 to November 2015. Barocio-Negrete was office manager and bookkeeper for this company.
This company reported $654,091 in payroll, and a forensic audit revealed it actually had $4,679,409 in payroll.
The underreporting by both companies resulted in a loss of $2,165,308 in premiums by State Compensation Insurance Fund.
All four family members were arraigned on April 25. They are scheduled to return to court on August 1, 2023.