The owner of a large San Francisco-based janitorial company was sentenced to jail and ordered to pay more than $8 million in restitution for a workers’ compensation fraud scheme.
Gina Gregori, owner of GMG Firenze and Billings DBA Apex, was sentenced to six years in jail and ordered to repay $8,382,788 in premiums owed to the California State Compensation Insurance Fund and a private insurance company.
The sentencing is a “split sentence” meaning Gregori will be able to serve half of the jail time outside of prison.
Gregori was taken into custody March 2 to begin serving her sentence.
‘Fraud schemes often complex, use creative accounting’
An investigation by the California Department of Insurance Fraud Investigators and the San Francisco District Attorney’s Office found that Gregori and her companies “grossly underreported payroll.”
In executing her fraud scheme, Gregori:
- submitted falsified California Employment Development Department documents
- claimed far lower numbers of employees and wages paid than were stated in the records she filed
- maintained two separate ledgers for payroll, each with a different set of numerical data
- changed the company name and registration with the Secretary of State
- substituted a family member for herself as the listed owner, and
- opened new company bank accounts, making hers appear to be a newly established company to obtain lower premiums.
The investigation involved the execution of three search warrants, the search of nine locations and the seizure of more than two terabytes of evidence.
“Fraud schemes, like those in this case, are often complex, involving creative accounting by company owners, to reduce the amount they owe in workers’ compensation premiums,” said San Francisco Assistant District Attorney Alex Feigen Fasteau. “This kind of fraud undermines protections for honest workers and increases premiums for honest businesses, making it more difficult for them to survive.”