The good work of the Commission continues. Insured employers pay part of their Workers' Compensation Assessment towards the Commission's work. The contribution for 2017 is .001675 of an employer's premium. Self-insured employers pay a similar amount of their costs. For less than 2 tenths of 1 percent of premium, the most recent amount collected for 2016 was approximately $55 million. Of this, $20 million went to combating provider fraud, and has resulted in indictments of 75 medical providers for over $1 Billion in fraudulent claims. The remaining $35 Million went to California District Attorneys who must now propose future plans of using the incentive funding. 

Oakland—The Department of Industrial Relations (DIR) and Cal/OSHA are pleased to announce the latest release of the free “Pocket Guide for the Construction Industry.” This publication allows workers, employers and supervisors to quickly reference key safety requirements detailed in clear, concise terms.

“This guide is our most requested Cal/OSHA publication,” said Cal/OSHA Chief Juliann Sum. “It is indexed to help employers and employees easily find the latest safety requirements on many topics related to construction, such as airborne contaminants, blasting, fall protection, heavy equipment, and multi-employer worksites.”

Included in the new edition are regulatory updates in subjects that include (but are not limited to):

• Structure erection and construction – section 1710
• Forklifts – section 3650
• Hazard communication - section 5194
• Heat illness prevention – section 3395

• Lockout/blockout procedures – section 3314
• Personal protective equipment –sections 1514, 3380, 3384

Cal/OSHA helps protect workers from health and safety hazards on the job in almost every workplace in California. Cal/OSHA’s Consultation Services Branch provides free and voluntary assistance to employers and employee organizations to improve their health and safety programs. Employers should call (800) 963-9424 for assistance from Cal/OSHA Consultation Services.

Employees with work-related questions or complaints may contact DIR’s Call Center in English or Spanish at 844-LABOR-DIR (844-522-6734). The California Workers’ Information line at 866-924-9757 provides recorded information in English and Spanish on a variety of work-related topics. Complaints can also be filed confidentially with Cal/OSHA district offices.

Fresno Bee

http://www.fresnobee.com/2014/08/29/4095764_study-construction-workers-unreported.html?sp=/99/170/&rh=1

Article by Bonhia Lee

L.A. Times

http://www.latimes.com/business/la-fi-california-construction-underground-economy-20140829-story.html

Article by Tiffany Hsu

California's construction industry is sinking underground. That's the conclusion of a new study from the Los Angeles-based Economic Roundtable that found more than 143,900 jobs – or one out of six jobs –in California's $152 billion construction industry were part of the so-called underground economy in 2011. Of those, 104,100 jobs were unreported by employers and more than 39,000 employees were misclassified as independent contractors.

The study, underwritten by the United Brotherhood of Carpenters, found the number of construction workers in the underground economy has skyrocketed 400-percent since 1972.

Researchers defined the underground or informal economy as workers who were not protected legally or socially in their jobs. Particularly vulnerable are immigrants, who made up 43-percent of the California construction labor force in 2012.

“Construction once provided livelihoods for many workers to live the Californian Dream,” lead researcher Yvonne Yen Liu said in a statement. “That dream has unfortunately turned into a nightmare as informality increases and many are pushed into contingent work. Construction is a low-road model of an industry sinking underground. Informality threatens to become the new normal. To get back on our feet, California needs to raise the floor wage so informal workers are paid a fair wage and enforce labor standards.”

Click link below to read the full article on the 89.3 KPCC blog.

http://www.scpr.org/blogs/economy/2014/08/31/17227/1-in-6-california-construction-jobs-part-of-underg/

California Contractors And CALPASC Commend State And Local Agencies For Keeping The Heat On Fraudulent Contractors To Level The Playing Field

SACRAMENTO, Calif., Dec. 5, 2013 /PRNewswire/ -- California construction contractors, the California Professional Association of Specialty Contractors (CALPASC) and heating, ventilating and air conditioning associations applaud the joint efforts of the California Department of Industrial Relations (DIR), City of Los Angeles Bureau of Contract Administration (LA-BCA) and Orange County District Attorney to aggressively investigate and prosecute construction fraud.  Announced in yesterday's news release, Shamseddin Hashemi-Mousavi, an Orange County business owner, was charged with 48 felony counts on a public works projects, and if convicted, faces up to 44 years and six months in state prison.  The owner is charged with tax and insurance fraud of more than $120,000 and paying less than prevailing wage to some of his employees, while keeping the dollar difference himself. In the media release, California Labor Commissioner, Julie A. Su reiterated the DIR's commitment to work with agencies throughout the state to shine a spotlight on employers whose intent is to swindle employees and workers out of just wages.

The following statements were issued by construction industry representatives:

Brad Diede, Executive Director, CALPASC 
"Cheating contractors from all walks of life are getting caught more often thanks to the unprecedented cooperation of state and local enforcement agencies.

"Ridiculously low bids from subcontractors should be a red flag for awarding bodies. With the increasing coordination of these agencies, it's only a matter of time before those who hire non-compliant contractors also will be held responsible."

Robert Helbing, President, Institute of Heating and Air Conditioning Industries 
"Running a successful contracting business is a particular challenge in today's environment, where construction represents just a fraction of the state's economy compared to five years ago.

"We commend the Orange County District Attorney's Office for investigating the actions of this contractor, and urge that he be prosecuted fully for his alleged failures to comply with California's Labor Code requirements on wages, taxes and insurance.

"Frauds who cut corners and cause loss of income and protections for construction workers also crowd responsible law-abiding contractors out of the marketplace."

Cyndi Marshall, Executive Vice President, California Association of Sheet Metal and Air Conditioning Contractors, National Association 
"We represent hundreds of professional licensed and highly skilled sheet metal and air conditioning contractors who fully support prevailing wages and compete for public works projects in California. 

"We are extremely pleased that the DIR, LA-BCA and Orange County District Attorney have worked in concert to diligently enforce wage laws in California and are prosecuting unethical contractors who compete unfairly against our law-abiding contractors and skilled workers.

"We look forward to their continued efforts to help level the playing field for good contractors who bid responsibly on public works projects in this state."

SOURCE California Professional Association of Specialty Contractors

California Contractors And CALPASC View Insurance Commissioner's New Grant Program As Effective Tool To Fight Fraud

SACRAMENTO, Calif., Oct. 29, 2013 /PRNewswire/ -- Two days after publicizing another conviction of a contractor committing workers' compensation insurance premium fraud, California Insurance Commissioner Dave Jones announced on October 24 that he is awarding$32 million in grants to continue fighting against such fraud. Funded through employer assessments, the money will be distributed to 36 California county district attorney offices to support law enforcement efforts of investigating and prosecuting cases of workers' compensation fraud.

This type of funding enabled the Santa Cruz County District Attorney to prosecute Jeffrey Thranow, owner of Costa Bella Builders, who was convicted of committing workers' compensation insurance premium fraud for failing to report employees to his insurance carrier or to the Employment Development Department (EDD). Despite holding a valid contractor's license, Thranow paid employees in cash to avoid paying workers' compensation insurance. He also dissuaded an injured employee from filing a workers' compensation claim.

Vittorio Castelli, Thranow's son-in-law, also was convicted of felony insurance fraud, and Thranow's daughter, Kathleen Castelli, was convicted of misdemeanor insurance fraud. Costa Bella Builders was ordered to pay over $47,000 in premium restitution, back taxes to EDD and pay $37,000 in restitution for the injured worker's claim.  

According to Commissioner Jones, "Thranow cheated both his workers' compensation insurer and the State of California out of nearly$100,000, and by doing so passed the cost of his fraud onto consumers across the state."

The following statements were issued by various construction industry representatives:

Brad Diede, Executive Director, California Professional Association of Specialty Contractors (CALPASC)
"By looking at Thranow's company's website, this trade contractor takes great strides to appear legitimate to potential customers. But clearly from this conviction, this contractor is anything but legitimate in putting employee safety and welfare at great risk.

"Unfortunately, plenty of legitimate contractors are losing work to dishonest characters like this one.

"There are many legitimate contractors who should get this work. We appreciate enforcement agencies that are addressing both large and small construction projects by pinpointing serial and flagrant violators to combat the underground economy."

Bobbie Everett, President, The Wood Connection, and Board Member of the National Association of the Remodeling Industry, Silicon Valley Chapter
"Our company has been called out to finish so many jobs for homeowners who were conned by fraudulent contractors. We are pleased to see enforcement branches of the state and local government take action against UNLICENSED contractors and the LICENSED contractors who are cheating, too."

Ramy Louis, Chief Executive Officer/General Manager, Tile and Grout King and Member of the National Association of the Remodeling Industry, Silicon Valley Chapter
"During the housing crisis and economic collapse in California, many contractors were scrambling to land jobs at almost any price. This bidding-war environment led many construction businesses to fail and/or cheat the system. Many contractors took cash payments from clients and used them for payroll to avoid paying workers' compensation and payroll taxes. Contractors willing to resort to these types of tactics demonstrate the lack of integrity of some in this industry. It also is reflected in inferior work, poor customer service and inadequate or no warranties on services provided. The Commissioner's efforts to stop this from continuing are commendable."

James Stout, Owner, The Integrated Lifestyle, and Vice President, the National Association of the Remodeling Industry, Silicon Valley Chapter
"I consult for legitimate construction trade contractors who are professionals playing by the books and not deceiving the public like the impostors convicted for these violations. There are plenty of genuine construction contractors whose qualifications can be verified by local construction associations."

SOURCE California Professional Association of Specialty Contractors (CALPASC)

California Contractors React To Statewide Undercover Sting Operation

CALPASC and Industry Associations Caution Homeowners About Hiring Convicted Felons

SACRAMENTO, Calif., Oct. 17, 2013 /PRNewswire/ -- Contractors State License Board (CSLB) investigators recently carried out an undercover sting operation in six California counties where 75 contractors were arrested and may face criminal charges. CSLB's Statewide Investigative Fraud Team posed as homeowners and sought bids for home improvements covering a variety of trades as well as tree removal work. CSLB staff coordinated the operation with various state and local law enforcement agencies and district attorneys.

Of those caught, two are registered sex offenders; two have several prior felonies, including robbery, rape, burglary and drug possession; and three have an active arrest warrant. Several of the arrestees were using other contractors' license numbers, and some of them also may be charged for contracting without a license, illegal advertising, failing to carry workers' compensation coverage for employees and requesting an excessive down payment, which by law cannot exceed 10 percent of the contract or $1,000, whichever is less.

Representatives from several construction associations issued the following statements about the sting operation:

Brad Diede, Executive Director, California Professional Association of Specialty Contractors (CALPASC)
"Coordinated efforts must continue to focus on small construction projects, not just large commercial and private projects, that put the public at risk. There are plenty of properly licensed contractors who perform safe, quality work.  Homeowners put themselves at risk by taking the lowest bid without checking a contractor's license.

"CSLB continues to make great strides combatting the underground economy by effectively coordinating with state and local enforcement personnel, seeking legislative changes to help with construction enforcement and working with the public to improve their efforts."

Cindy Carey, Chief Operating Officer, Starburst Construction, and Chair of the Board of Directors, Silicon Valley Chapter of the National Association of the Remodeling Industry
"Although legitimate contractors enhance the professionalism, performance and perception of the remodeling industry; unfortunately, these swindlers damage the reputation of our industry. We will continue supporting enforcement agencies working together to catch fraudulent actors and create a safer environment for the public where legitimate contractors have an opportunity for work."

Terry W. Osburn, Vice President, Wm. B. Saleh Co. Bakersfield and Immediate Past President, Painting and Decorating Contractors of California, Inc.
"Although it's appealing to use unlicensed contractors during these difficult economic times, consumers must realize they are putting themselves at risk as well as unlicensed contractors' employees. And, it takes work away from legitimate contractors who are protecting the economy, their employees and the consumer. When one is harmed, all are harmed. We are grateful for the efforts of the CSLB to uncover and pursue unlicensed contractors who continue to undermine the economy and the professionalism of our trades."

J.T. Bradley, President, Bradley Builders, and Past President of the Sacramento Chapter of the National Association of the Remodeling Industry 
"We work hard to promote professionalism, education and ethics within the construction remodeling industry and our communities. We welcome these ramped-up efforts by enforcement agencies. There is no reason homeowners have to turn toward charlatans to work on their homes."

Kate Leyden, Executive Director, Valley Contractors Exchange
"With increasing interest in home remodeling and repairs, opportunists are poised to take advantage of homeowners. We applaud the coordinated efforts of statewide agencies to apprehend unlawful contractors and urge consumers to educate and protect themselves by checking contractors' licenses."

Ryan Holmes, President, Accel Framing, Inc. 
"Legitimate construction contractors abound. Homeowners should do their homework and consult with local construction associations to identify valid contractors. Legitimate contractors support all enforcement efforts to eliminate the underground economy."

SOURCE California Professional Association of Specialty Contractors (CALPASC)

SACRAMENTO, Calif., Aug. 13, 2013 /PRNewswire/ -- The California Professional Association of Specialty Contractors (CALPASC), representing hundreds of contractors, applauded yesterday's announcement by the Department of Industrial Relations (DIR) to implement a mechanics' lien to recover nearly a quarter of a million dollars in unpaid wages for 31 construction workers at a Northern California project extending from January through May 2013. The joint efforts of the DIR and the Division of Occupational Safety and Health (Cal/OSHA), through California's Labor Enforcement Task Force (LETF), uncovered that Redwood Coast Hospitality, LLC hired Jansen Construction to build a Holiday Inn Express in Eureka, California. Jansen Construction subsequently subcontracted with PacWest Contracting LLC out of Bend Oregon, which was not appropriately licensed in California and misclassified employees by hiring them under the pretext of independent contractors. According to the DIR's release, the joint enforcement efforts "also uncovered 13 workplace safety violations including five categorized as serious for unsafe ladders, failure to provide fall protection and scaffolding, inadequate training to recognize fall hazards and unguarded saws," resulting in $27,000 of citations.

In response to the DIR's August 12, 2013, announcement, CALPASC Director of Risk Management Bruce Wisk issued the following comments:

"The combined actions of DIR and Cal/OSHA send a strong message that enforcement can reach the far corners of California, not just the urban centers.

"The multi-agency collaboration efforts of LETF continue to demonstrate that unlawful employers who intentionally take advantage of workers and place them in a vulnerable environment will be targeted and brought to justice.

"Legitimate California contractors have been subjected too long to unfair competition from out-of-state contractors.

"This enforcement action signals project owners that their jobs will be hit with liens and incur other tie-ups when hiring unsafe and non-compliant contractors.

"California workers should not be subjected to unsafe conditions and unfair payment practices. We appreciate the LETF taking back the ground for workers and legitimate contractors."

SOURCE California Professional Association of Specialty Contractors (CALPASC)

CALPASC Supports Commissioner in Putting Proper Incentives in Construction Contracting

SACRAMENTO, Calif., June 7, 2013 /PRNewswire/ -- Once again, the California Labor Commissioner's enforcement efforts are paying off – for state coffers and legitimate contractors – but not for general contractors and subcontractors who skirt the law. A press release issued on June 6, 2013, by the Department of Industrial Relations (DIR) announced yet another round of citations, this time totaling almost $750,000, for public works violations by general contractors and their subcontractors who failed to pay proper prevailing wages and overtime rates to more than 50 employees.

These citations were issued to prime contractors Tutor Perini Corporation in Sylmar for work on Orange County public libraries; Cyrcon Builders, LP in Los Angeles for work on Gateways Hospital and Mental Health Center; Intermountain Electric dba Colorado IM Electric inDenver, CO for work on the Greenfield Union School District of South Bakersfield; and Tidwell Concrete Construction of Indio for work on the San Diego Community College District's Miramar Library Learning Resource Center.  Subcontractors who were cited include Cal Framing of Redlands; Canoga Park-based K A Y General Services dba Rudy's Construction; and Oceanside-based Campbell Certified, Inc.

In response to the DIR's announcement, Brad Diede, Executive Director, California Professional Association of Specialty Contractors (CALPASC), issued the following comments:

"Citations such as these are becoming more regular occurrences and confirm the fact that prime contractors need to be as concerned as subcontractors. (See http://www.dir.ca.gov/DIRNews/2013/IR2013-22.pdf#zoom=100; http://www.dir.ca.gov/DIRNews/2013/IR2013-21.pdf#zoom=100; http://www.dir.ca.gov/DIRNews/2013/IR2013-16.pdf)

"Labor Commissioner Su repeatedly has stated that prime contractors are jointly and severally liable for their subcontractors who fail to follow California's labor law.

"The Construction Enforcement Coalition, composed of union and non-union affiliated organizations, has a key objective to publicize actions like these to serve as a detractor to contractors who abuse the system as well as those who hire deceitful subcontractors.

"Awarding authorities and prime contractors need to think twice before hiring the lowest bidding subcontractors.

"And out-of-state contractors working in California are subject to the same scrutiny and enforcement efforts. Some state enforcement agencies willingly travel out of state to catch companies that fail to comply with California's laws and regulations. 

"We intend to keep these issues very visible as we meet throughout the state with enforcement agency representatives."

CONTACT: 
Brad Diede
Executive Director, CALPASC
(916) 973-2925  

SOURCE CALPASC: California Professional Association of Specialty Contractors

SACRAMENTO, Calif., May 9, 2013 /PRNewswire/ -- The Department of Industrial Relations' (DIR) recent announcement reminded prime contractors on public works projects about the consequences of hiring subcontractors who intentionally skirt the law by failing to pay prevailing wages. According to Christine Baker, Director of the Department of Industrial Relations (DIR), Labor Commissioner Julie Su "has reinvigorated public works enforcement in the state," resulting in three public works contractors, B.A. Marble & Granite, Inc. ofNorth Hollywood, Phoenix Floors of Orange and Johnson Business Holdings, doing business as Production Plumbing of Rancho Santa Margarita, paying more than $1,821,000 in wages and penalties due to deliberate violations affecting 94 employees. The public works projects included those at the University of California, Los Angeles, the Global Green Generational Charter School in Pacoima andSaddleback Community College in Orange County. The California Professional Association of Specialty Contractors (CALPASC), representing hundreds of contractors throughout California, welcomes the Commissioner's and DIR's continued, and yet intensified focus, on perpetrators on all construction projects, including public works projects.

In response to the DIR's May 7, 2013, announcement, Brad Diede, Executive Director, CALPASC, issued the following comments:

"When hiring subcontractors, prime contractors need to be wary of exceedingly low bids or other evidence of a contractor's inability to comply with the law. 

"In the case of B.A. Marble & Granite, Inc., the contractor's license has expired and three contracting business of the partners have licenses that have expired, were suspended or became inactive. If B.A. Marble & Granite, Inc. doesn't have the assets to pay the fines assessed by the Commissioner, the prime contractor will be jointly and severally liable for these amounts.

"This announcement, coming on the heels of the DIR's April 25 news release about obtaining settlements of more than $610,000 in wage assessments and penalties from four prime contractors on public works projects, demonstrates the fortified efforts of the agency."

The following comments are attributed to Plumbing-Heating-Cooling Contractors Association of California (PHCC) Executive Vice President Tracy Threlfall:

"PHCC and legitimate plumbing contractors across the state appreciate this effort by the Labor Commissioner. Unfortunately, by the time the Labor Commissioner becomes involved, the damage to workers, their families and the projects has already been done and, in many cases, the penalties, wages and other awards are never paid.

"It is imperative that awarding bodies and general contractors scrutinize subcontractors before hiring them and keep in mind there are compliant contractors ready and willing to do the work."

The following comment is attributed to Northern California Tile Industry Labor Management Cooperation Committee (NC Tile Industry LMCC) Compliance Officer Anthony Narducci:

"The NC Tile Industry LMCC applauds the efforts of the Labor Commissioner to level the playing field in the construction industry and send a strong message to contractors to obey the labor code."

SOURCE California Professional Association of Specialty Contractors (CALPASC)

State Enforcement Agencies End With A Strong Effort In 2012

CALPASC Continues to See Benefits in Focused Enforcement

SACRAMENTO, Calif., Sept. 27, 2012 /PRNewswire/ -- California's lawful contractors got an early Christmas present when Riverside County's District Attorney (DA) announced the conviction of 65-year-old Steven Morales earlier this week. Guilty of five felonies, including perjury and workers' compensation and tax fraud, along with white-collar fraud enhancement, Morales was responsible for $3.1 million in losses to the state and others. Morales lost his contractor's license in 1992 but continued to illegally conduct business by setting up his then 25-year-old son, Brian Todd Morales, as the contracting facade. In 2010, after a lengthy investigation by the DA, California Employment Development Department and insurance companies, Brian Todd Morales, who operated three businesses in his name, pled guilty to the workers' compensation and tax fraud. He was sentenced to four years in prison and ordered to pay $3.1 millionin restitution. The investigation revealed the father and son had cheated more than 400 employees out of unemployment insurance benefits from 2005 through 2008 and had not been reporting workers' injuries. They also were underreporting or not reporting the number of workers employed by their various companies.

The California Professional Association of Specialty Contractors (CALPASC) Executive Director Brad Diede stated:

"This conviction is particularly gratifying given the father's lack of integrity and leadership. It's satisfying to know prime contractors can no longer hire him and perpetuate the problem of defrauding the system. Hopefully, legitimate contractors now will receive the bids.

"The collaboration of these agencies and insurers to capture this lawbreaker exemplifies the exact ingredients needed to make a dent in the construction underground economy.

"The level of sophistication of some swindlers is frightening. However, this case sends a loud and clear message that if someone believes himself to be a mastermind and sets up a counterfeit corporation to avoid paying workers' compensation premiums and taxes, law enforcement will spend the extra time and effort to track the truly bad guy down.

"Unscrupulous companies across the nation go to wild extremes to be the lowest bid in construction jobs, as evidenced in the Morales case and the "cheat to compete" schemes in Florida, reported on earlier this year.

"It's invaluable when agencies like the Riverside County DA, the EDD, insurance carriers special investigative units and authorities from other states like Florida, which recently reported two additional arrests associated with the "cheat to compete" schemes, go the extra mile to catch these crooks.

"The deep-seated deception of those who participate in the underground economy, like Steven Morales, has created significant costs to the state, more than $7 billion in lost tax revenue, and additional costs associated with years of investigation and time in the courts. These costs could be avoided if prime contractors refuse to accept extraordinarily low bids that seem 'too good to be true.'

"Getting this man off the street and sentencing him can't come soon enough. We applaud the DA's tenacity for tracking down this 'behind-the-scenes' player and for ensuring he pays the full amount of losses created by his dishonesty."

SOURCE CALPASC

Collaboration Continues to Validate Program's Purpose

Coordination by California Agencies "Pays Off" for CALPASC's LEVEL Program

SACRAMENTO, Calif., May 24, 2012 /PRNewswire/ -- California's subcontractors knew industry fraud was growing and it would take a focused, coordinated effort among multiple parties to stop the bleeding, which is why they established the LEVEL Program.  The May 22announcement of charges against the owner of Southland Construction substantiates the purpose of the Program when agencies, such as the Contractors State License Board (CSLB), Department of Industrial Relations, Employment Development Department (EDD), Franchise Tax Board (FTB) and the Orange County District Attorney (OCDA), collaborate in catching deceitful contractors in the underground economy. "Law-abiding contractors are forced to vie against corrupt contractors like the owner of Southland Construction when bidding on work," said California Professional Association of Specialty Contractors (CALPASC) Executive Director Brad Diede. "These outcomes of state and local coordinated efforts are exactly what we intended when establishing the Lasting Effective Violator Enforcement Leadership (LEVEL) Program, that is to level the playing field for honest contractors to effectively compete."

According to recent reports, Southland Construction owner, Reza Mohammedi, previously convicted for criminal threats, is accused of more than 45 felony accounts related to public works contracts, including failure to file tax returns and filing false returns, failure to pay taxes, taking and receiving portions of workers' wages and recording false instruments. 

Operating out of multiple counties, Mohammedi allegedly hired undocumented Hispanic workers whom he threatened to "turn in" if they reported to authorities his elaborate scheme of falsifying payroll records.  Additionally, he allegedly falsely reported wages up to $53 per hour and provided workers with payroll checks in the same amount; however, he required workers to keep wages of only $13 an hour and instructed them to cash their paychecks and use this difference of up to $40 per hour to pay for project supplies or other workers' wages, resulting in more than $350,000 embezzled funds.  Mohammedi also is accused of instructing his workers on how to respond to public works inspectors if questioned about their wages.

"This owner's conduct triggered offenses against multiple agencies," said Doug Chappell, Business Manager, IBEW Local 441, Orange County, California.  "We are pleased agencies are focused on collaborating to apprehend these types of unscrupulous individuals, otherwise their destructive behavior would continue with the state losing millions of dollars, trustworthy contractors losing bids and employers taking advantage of employees."

CALPASC initiated the LEVEL Program in 2010 to encourage state agencies to work closely together in apprehending general contractors, builders and subcontractors who violate important labor and safety laws and regulations to gain an unfair competitive advantage. A prime example of this is the California's Labor Enforcement Task Force (LETF), a multiple agency collaborative effort to combat the underground economy and improve the state's business environment, which recently announced a hotline for Californiaworkers and employers to call in documented complaints or provide enforcement tips. 

California Labor Commissioner Julie Su said, "The results of this case and our partnership with the OCDA demonstrate that we take these violations seriously and will crack down on employers who cheat their workers and pose a threat to legitimate employers in the state. I intend to work with district attorneys across the state to ensure public works funds are used properly and workers are paid prevailing wages as required by law."

According to CSLB Registrar Steve Sands, "This is another example of successful collaboration between CSLB and its local and state partners. CSLB also is investigating Mohammedi for Labor Code violations on another public works project which, if substantiated, may result in revocation of his license."

Diede concluded, "When agencies collaborate and coordinate efforts, dishonest contractors will be caught, and the industry will be restored to where it rightfully belongs with the 'good guys' winning and the 'bad guys' behind bars."

The California Professional Association of Specialty Contractors is a nonprofit 501(c)6 trade association advocating on behalf of trade contractors and suppliers of building materials in California. CALPASC is committed to educating members on complex issues and advancing safety and compliance within the building industry.

SOURCE California Professional Association of Specialty Contractors

SACRAMENTO, Calif., May 14, 2012 /PRNewswire/ --  Building a facade to avoid tax obligations ultimately caught up with construction businessman, George Osumi II, who was using the names of family and friends to create ownership in companies. Cheating the system by under reporting more than $3.5 million in payroll to a workers' compensation insurance carrier, Osumi generated a loss to the State Compensation Insurance Fund (SCIF) of more than $814,000 in premiums. According to recent media reports, the Orange CountyDistrict Attorney's Office reported Osumi's indictment on numerous felony counts, including "misrepresenting facts to State Compensation Insurance Fund; failing to file a return with intent to evade tax; and willful failure to pay tax, unemployment insurance, and disability insurance deductions."

Within one week of the news of Osumi facing insurance-fraud charges, the California Department of Insurance (CDI) reported the arrest of Bay Area owners of United RMR Enterprises, Inc. and their worker for workers' compensation insurance fraud. Chad Oberquell, an employee of ITR Industries (ITR) falsely claimed he had been injured on the job, but CDI's investigation uncovered that Oberquell was actually injured while working on a weekend job with United RMR Enterprises, a competitor to ITR. Not only did United RMR Enterprises' owners, Sied "Mike Zarrin" Zarrinsaray and Ronak Barazandeh, fail to report Oberquell's injury, they also paid workers in cash without reporting payroll or withholding payroll taxes.

On behalf of honest subcontractors throughout state, the California Professional Association of Specialty Contractors (CALPASC) Executive Director Brad Diede congratulates CDI Commissioner Dave Jones' and the Orange County District Attorney's efforts to catch these deceitful contractors.

Diede stated:

"Both of these cases represent examples of contractors cheating the state out of dollars owed, but worse than that, they represent a double hit to honest contractors. When illegitimate owners pay an employee under the table while encouraging him to tap into a legitimate employer's workers' compensation coverage, contractors playing by the rules not only lose jobs to the fraudulent contractors but also lose their good workers' compensation loss ratio and have to pay extra into the workers' compensation system to cover for this sort of fraudulent behavior.

"We appreciate the focus and efforts of Commissioner Jones and the CDI in tracking down corrupt business owners and employees who abuse state laws by attempting to file false workers' compensation claims and game the system.

"We commend the Orange County District Attorney for nabbing this flagrant violator who cheated the system multiple times by operating with five different licenses since 1981, never carrying workers' compensation insurance and using illegitimate contractors to avoid or underreport workers' compensation claims.

"All too often subcontractors who cheat the system are awarded work by builders, general contractors and owners, while honest contractors continue to struggle and go out of business. When this happens, employees' safety goes at risk, the quality of work suffers and legitimate contractors lose much needed work in this poor economy.

"Through our LEVEL Program, we will continue fighting for effective and immediate enforcement to catch bad actors like these who thrive in the underground economy."

SOURCE California Professional Association of Specialty Contractors (CALPASC)