Los Angeles Business Owner Arraigned in $1 Million Workers’ Compensation Fraud Scheme
Los Angeles, CA (WorkersCompensation.com) - Marion Piggee, Jr., 68, of Los Angeles, was arraigned on seven counts of insurance fraud after an investigation by the California Department of Insurance revealed he was allegedly underreporting employee payroll by nearly $6 million in order to fraudulently reduce his business's workers' compensation insurance premium by over $1 million.
On November 28, 2016, the State Compensation Insurance Fund (SCIF) filed a suspected fraudulent claim with the Department of Insurance alleging potential insurance fraud. SCIF reported that Piggee, as owner of Center for Behavioral Change, an adult residential care facility, allegedly underreported employee payroll in order to reduce the proper rate of insurance premiums owed to SCIF.
A routine audit for the policy period of November 1, 2014, to November 1, 2015, found that Center for Behavioral Change reported one employee and payroll wages of $8,035. However, the audit revealed wages to be $881,593 for the same policy year. It also showed Piggee's business had obtained workers' compensation insurance for one facility, but failed to disclose they had also acquired eight other facilities.
The investigation found that Piggee had allegedly been underreporting company payroll from November 2009 through May 2016. The investigation also revealed Center for Behavioral Change had 60 employees, despite their reporting of only one employee. The business underreported payroll by $5,982,410, which resulted in a premium loss to SCIF of $1,017,937.
Piggee was arraigned at the Los Angeles Superior Court on April 6, 2021. This case is being prosecuted by the Los Angeles County District Attorney's Office.
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