A Monterey County roofer, formerly in charge of the business Costa Pacific Roofing, was convicted of workers’ compensation fraud and tax evasion on Wednesday, April 27. Juan P. Gutierrez was sentenced to 10 years of felony probation and 250 days in county jail and was presented with fines over $20,000.
An investigation conducted by the Joint Enforcement Strike Force (JESF) revealed that the defendant had committed premium fraud by falsely reporting that he had no hired employees and no payroll between 2010 and 2013. In 2007, Gutierrez registered as an employer and only reported wages for the first three quarters of that year; the account was closed as a result of inactivity.
California state law requires employers to have workers’ compensation insurance for employees, and employers are also required to report and pay taxes to the Employment Development Department.
Gutierrez, however, committed two counts of making a material misrepresentation in order to secure a lower workers’ comp. insurance as well as failing to file tax returns. The California Department of Insurance and the EDD conducted audits based upon documentation and evidence of employees’ wages during the charged time period.
One of 50,000 establishments engaged in the installation of roofing, the defendant’s company was located in Salinas and had been around for a number of years. A web search reveals that Costa Pacific Roofing had a very shady Internet presence; no official website was discovered and only two customer reviews could be found.
It doesn’t appear that the company itself was in the habit of scamming customers, though many roofing scams have been identified across the U.S. recently. It seems that Gutierrez was a legitimate roofer who was trying to cut corners financially.