Two California business owners and an employee with both companies were charged with multiple counts of workers’ compensation insurance fraud after an investigation revealed they conspired together to lower insurance premiums.
Troy Williams, owner of Archer Building Company, John Allison, owner of Allison Development, and Nanci Mormon, an employee at both companies, were arraigned May 16 after investigators found they conspired to illegally lower their insurance premiums and defraud the State Compensation Insurance Fund of more than $125,000.
Business created to divert payroll
Williams owned and operated his framing business since 2001, which reported carpentry payroll from 2013 to 2016. However, in 2016 the company’s work-related claims costs increased, resulting in an increase to its workers’ compensation insurance rates.
Investigators with the California Department of Insurance and the El Dorado County District Attorney’s Office found that Allison, one of Williams’ employees, created Allison Development. Between 2016 and 2020, Williams diverted his company’s carpentry payroll to Allison’s company to avoid paying accurate workers’ compensation insurance premiums.
In 2020, Allison cancelled the policy and the employees transferred back to Williams’ company.
Morman was the bookkeeper and point of contact for insurance audits for both companies, and she was also charged for the attempt to defraud the State Compensation Insurance Fund of $127,795.
All three are scheduled to appear in court May 26, 2022.