CA: Encino Construction Company Owner Arraigned in $25 Million Workers' Comp Fraud Scheme
Los Angeles, CA (WorkersCompensation.com) - Nissim Vaknin, 49, of Encino, was arraigned for felony insurance fraud after an investigation by the California Department of Insurance revealed he allegedly underreported employee payroll by over $70 million in order to fraudulently reduce his business's premium for workers' compensation insurance by over $25 million.
The State Compensation Insurance Fund (SCIF) filed a suspected fraudulent claim in 2018 with the Department of Insurance after a routine payroll audit for Van Nuys-based NV Construction, owned by Vaknin, identified large discrepancies.
Department detectives conducted a search warrant of NV Construction's bank records, which showed that for the policy period of October 2014 through March 2018, Vaknin reported a total of $4,083,483 in payroll to SCIF; however, the Department's investigation found the actual payroll was $74,741,381. Vaknin underreported payroll by over $70 million, resulting in a premium loss to SCIF of $25,129,032.
“By allegedly underreporting payroll, this business owner not only hurt other businesses who pay for this fraud through higher premiums, he also put their own employees at risk,” said Insurance Commissioner Ricardo Lara. “My Department is committed to investigating fraud in order to protect workers and honest businesses, especially now as our state is struggling through this pandemic.”
Vaknin was arraigned at the Los Angeles Superior Court on May 28, 2021. This case is being prosecuted by the Los Angeles County District Attorney's Office.
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