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Denair woman convicted of workers’ compensation fraud

POSTED March 13, 2018 1:17 p.m.

A Denair woman who operated an employment services business has been convicted of workers’ compensation fraud after underreporting the business’ payroll and number of employees.

Aileen Ramirez, 31, was convicted of felony workers’ compensation insurance premium fraud. This conviction resulted from a joint investigation by the California Department of Insurance, Fraud Division and the Amador County Workers’ Compensation Fraud Unit, which investigates and prosecutes insurance fraud cases in Amador, Stanislaus, Calaveras, and Tuolumne Counties through a grant provided by the California Department of Insurance. 

In 2012, Ramirez was the owner and CEO of Quality Employment Services, LLC, in Modesto, a company that provided temporary workers to cover absences, skills shortages and seasonal workloads for client companies.

As required by state law, Ramirez had to have workers’ compensation insurance for her employees and submit payroll records to the California State Compensation Insurance Fund showing the number of employees and their income. This information helps the State Fund set workers’ compensation insurance premium rates for other employers throughout the state.

Ramirez obtained a workers’ compensation policy for her business from the California State Compensation Insurance Fund in February 2012 and maintained that policy through August 2014. However, an audit later showed the amounts and number of employees she had reported were not correct, according to the Stanislaus County District Attorney’s Office.

When State Fund performed an audit of the policy, it discovered that Ramirez had underreported her payroll and total number of employees in order to obtain a lower workers’ compensation insurance premium. In total, Ramirez underreported $2.8 million dollars in payroll that resulted in a loss to the State Fund of $525,253.58 in insurance premiums.

In April of 2016, Ramirez was charged with insurance fraud in Stanislaus County Superior Court. On Feb. 27, Ramirez pled no contest to the felony charge, in that she knowingly made false and fraudulent material statements to State Fund for the purposes of determining and reducing the premium, cost or rate of her workers’ compensation insurance policy. She was immediately sentenced to 120 hours of community service, three years formal probation, and ordered to pay restitution of $525,253.58 to the State Compensation Insurance Fund.

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