The owner of two California cleaning companies and his son were charged in a $12 million workers’ compensation fraud scheme.
Edgardo Cabrales Sr., owner of Pine Building Maintenance and Network Facility Management, and his son, Edgar Cabrales Jr., were each charged with five felony counts of insurance fraud after a California Department of Insurance investigation.
Cabrales Sr. was arrested Oct. 23 at the San Francisco International Airport and his son self-surrendered Oct. 25.
Scam resulted in $4.2 million in lost premiums
The investigation revealed the father and son allegedly underreported $12 million in payroll to save on workers’ compensation premiums.
California’s State Compensation Insurance Fraud (SCIF) suspected the two businesses of workers’ compensation insurance fraud, leading to the investigation.
Investigators found that since 2016 the Cabrales had only secured insurance coverage for a portion of their Pine Building Maintenance employees and had never secured a policy for the employees of Network Facility Management.
The duo failed to report about $12 million in wages to SCIF in order to save money on insurance, resulting in $4.2 million in lost premiums.