A San Francisco plastering contractor is in trouble with the law for a $5.8 million workers’ compensation fraud scheme.
Multiple felony charges against the owners and office administrator of Cullinane Plastering were announced by the San Francisco District Attorney’s Office for “a years-long scheme to defraud employees, the State Compensation Insurance Fund (SCIF) and California Employee Development Department (EDD).”
Owners still at large, assets frozen
Gemma Maher, office administrator, was charged Sept. 12. Owners Denis Cullinane and Jeremiah “Jerry” Cullinane, who are still at large, have outstanding warrants against them for charges related to insurance and tax fraud.
The owners’ assets have been frozen to prevent them from “dissipating those assets and to preserve the funds for victim restitution.”
Scheme discovered after employee injury
Maher and the two owners allegedly engaged in a scheme to defraud employees, insurance providers and the state by concealing about $5.8 million in unreported payroll to avoid paying insurance premiums and payroll taxes.
The scheme was discovered after a Cullinane Plastering employee was seriously injured on a job site on May 8, 2019. Maher and the Cullinanes are accused of concealing the employee’s existence and injury from their workers’ compensation insurance carrier, SCIF, for almost a year.
Maher disclosed the injury to SCIF on March 12, 2020, and made “multiple alleged misrepresentation about the worker’s employment history and injury to further the fraud.”
Submitted fraudulent payroll info for years
An investigation revealed that not only did the company owners and Maher conceal that employee’s injury and payroll information, but that they had been submitting fraudulent payroll information to SCIF from 2018 through 2020 and to EDD from 2017 through 2020. That false information artificially lowered the company’s workers’ compensation insurance premiums and tax contributions.
This led to a $270,000 loss to SCIF in unpaid insurance premiums and a loss of more than $300,000 in unpaid payroll taxes to EDD. This is in addition to more than $1.5 million in unpaid taxes and penalties.