Workers’ compensation fraud charges filed against two California business owners and a joint employee have been dropped after new evidence revealed they were acting on advice from an insurance agency.
Troy Williams, owner of Archer Building Company, John Allison, owner of Allison Development, and Nanci Mormon, an employee at both companies, had their charges dismissed after “last-minute evidence surfaced that showed the defendants were acting on the professional advice of a Roseville insurance agency,” according to The Sacramento Bee.
A representative of the agency advised the trio in an email that a carpentry company qualified as a new business and could help lower insurance rates from the State Compensation Insurance Fund (SCIF).
Owner suffers brain cancer, wanted to reduce workload
Williams, Allison and Mormon were accused of a four-year scheme to save more than $127,000 in insurance premiums by having Williams divert his company’s carpentry payroll to Allison’s company. Allison was one of Williams’ employees and Mormon worked for both companies.
Williams, who suffers from brain cancer, “insisted the movement of employees from Archer to Allison wasn’t to save on workers’ compensation rates but to keep several dozen Archer workers including Allison employed in case of Williams death.”
Williams told The Sacramento Bee that his business partner died in 2016 and that he was receiving chemotherapy that prevented him from managing his business adequately. Further, he wanted to reduce his workload and not have any direct employees, so he relied on subcontracted workers from Allison’s business.
The California Department of Insurance and El Dorado County District Attorney called it a workers’ compensation fraud scheme until Sept. 23, when defense attorneys found the email from the insurance agency, resulting in the charges being dropped against all three defendants.