TC grand jury indicts 8 co.’s for $39 million workers’ comp, payroll fraud
On April 5, 2013, a Tulare County criminal grand jury indicted eight local businessmen on suspicion of workers’ compensation insurance premium fraud and payroll tax evasion.
In the indictment, Juan Luis Ayala Lopez, 39, of Tulare; Alfredo Ayala, 42, of Avenal; Gregorio Jacobo, 50, of Coalinga; Javier Isidro Diaz, 48, of Bakersfield; Heriberto G. Ruiz, 53, of Delano; Jorge Marin Perez, 55, of Shafter; Isidro Brown Estrada, 55, of Fresno; and Porfirio Rios, Jr., 35, of Reedley, were collectively charged with 50 counts of making fraudulent misrepresentations to private insurance carriers, the State Compensation Insurance Fund (SCIF) and the California Employment Development Department (EDD.)
Believed to be the largest case of its kind in California, the total fraud committed is estimated to be in excess of $39,000,000.
Five of the defendants, Juan Luis Ayala Lopez (d.b.a. JA Contracting and JA Contracting Labor Management, Inc.), Alfredo Ayala (d.b.a. Ayalaz Ag Services) , Gregorio Jacobo (d.b.a. Jacob’s Tree Specialist), Heriberto G. Ruiz (d.b.a. J&H Tree Services), and Jorge Marin Perez (d.b.a. Golden Brothers Contracting), are farm labor contractors headquartered in Visalia. All were indicted for falsifying payroll reports and tax returns with the intent to lower their workers’ compensation insurance premiums and payroll tax liability.
Bookkeeper Javier Diaz is alleged to have assisted these businesses in calculating and reporting fraudulent payroll figures. Isidro Estrada, owner of Intervalley Insurance Services in Fresno, and his agent, Porfirio Rios, Jr., are charged in the indictment with making material misrepresentations to insurance carriers with the intent to secure lower premiums for their client, JA Contracting Labor Management, Inc.
The Office of the District Attorney’s Bureau of Investigations, Financial Crimes Division, served arrest warrants on all eight defendants following the presentation of the indictment.
The defendants were arraigned on Friday, April 12th in Tulare County Superior Court in Visalia. Bail was set in the following amounts: Juan Luis Ayala Lopez, $1,000,000; Alfredo Ayala, $500,000; Gregorio Jacobo, $500,000; Heriberto Ruiz, $500,000; Javier Diaz, $100,000; Jorge Perez, $50,000; Isidro Estrada, $75,000; and Porfirio Rios, Jr., $25,000. A trial date will be set at the next court appearance on June 24, 2013 in Department 6 of the Tulare County courthouse in Visalia.