Pay to Play

By Alex Distefano

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Posted November 10, 2011 in News

Riverside County has a message to business owners who fail to pay workers compensation insurance: you will be caught. Damn straight.

One common illegal activity occurs when employers pay their workers “under the table,” in cash—leaving no paper trail, according to Riverside County Deputy District Attorney Mike Mayman of the Insurance Fraud Unit. This practice increases an employer’s profits; the company gets to keep more money by not paying the legally required workers compensation insurance.

One recent case involved the Corona-based Stereo Pros. According to the Riverside County District Attorney’s office, Stereo Pros owner Rafat Fawwaz Sweidan was ordered to pay more than $45,000 for committing insurance fraud; he purposely misclassified his employees’ job descriptions in order to avoid paying for their compensation insurance.

Sweiden has since been convicted for failing to pay this insurance, failure to withhold unemployment insurance taxes from employees as well as failure to provide employees with documentation for deductions. See a pattern here?

On Oct. 7, Riverside County Superior Court Judge Michael Donner sentenced Sweidan to three years probation and three consecutive one-year terms in county jail. The judge then allowed the jail time to be suspended, as long as Sweidan does not violate any terms of his probation.

According to Mayman, this was just one of a number of businesses that were targeted randomly by his Insurance Fraud unit. Mayman says his investigators were in the Corona area before they investigated Stereo Pros.

“Our investigators went into this business, asked for his workers insurance policy and he didn’t have one,” Mayman says. “But people need to know [that] we do not target any specific businesses. We target all businesses.”

A Stereo Pros employee told the Weekly that the store was still open for business, but says he was unfamiliar with the recent legal problems the owner had faced. The employee declined to be identified and make further comment.

Mayman says that in these tough times, business owners who are abiding by the law are affected by those who fail to pay their share.

“This practice is hugely problematic,” Mayman says. “It puts the burden of injured workers onto everyone else. The businesses that do this are then given an unfair advantage in competition because they are not paying their fair share while others are. So now some places are going out of business because others are not paying their workers comp insurance. Unfortunately, we work these kinds of cases all the time.”


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