Massachusetts Business Owner Indicted For Avoiding $110K In Workers' Compensation Premiums

Boston, MA (Workerscompensation.com) -A Massachusetts owner/operator of a temporary employment agency has been indicted in connection with a scheme to dodge over $110,000 in worker’s compensation premiums. The Worcester County Grand Jury charged 56-year-old Sovane Kien with six counts of Worker’s Compensation Fraud, one count of larceny for more than $1,200, and five counts of larceny over $250.

Kiehn’s temp service agency, Peoples Temp Services, Inc., was incorporated in 2009 as an employment and temporary staffing agency. The company holds an employment agency license that expires July 2020. However, authorities say Kien had filed a voluntary closure of People’s Temp on August 7, 2019, with the Massachusetts Secretary of State.

The Attorney General’s office alleges that from August 2012 to August 2018, Kien substantially underreported its number of employees as well as the amount that he paid his workers in response to audits that had been conducted by his company’s worker’s compensation insurance provider.

The statutes under which the grand jury charged Kien all incur different penalties. For instance, workers’ compensation fraud is a felony for anyone who knowingly makes misleading or false statements, submission, representation, or engages in employee leasing practices that are deceptive all to avoid paying insurance premiums in full. This violation carries a prison sentence up of to five years, in addition to a fine up to $10,000. Also, a person found guilty of worker’s compensation fraud will be ordered to make restitution for any financial loss to any victim that resulted.

The charge of theft over $1,200 is a felony that could carry a possible prison sentence up to five years and a fine of up to $25,000. The larceny charge of less than $1,200 is a misdemeanor and could result in a  one-year jail term and a fine of $1,500.

“This type of fraud has a significant impact upon employees and employers,” according to a statement from the Massachusetts Attorney General’s office. “The employers that play by the rules and report their employees’ wages are at a disadvantage when competing against employers that do not play by the rules. There has been approximately $65 million in court-ordered restitution on workers’ compensation insurance fraud cases that we have worked.”

Kien is scheduled to be arraigned in Worcester Superior Court on October 22. 

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