CA IC Announces San Jose Man Charged with Felony WC Insurance Fraud

Sacramento, CA (CompNewsNetwork) - Insurance Commissioner Steve Poizner announced today the arrest of a San Jose man in connection with suspected workers' compensation fraud. Daniel Ethan Nelson, 48, was arrested at the Oakland Airport by Alameda County Sheriff's Deputies on April 14 and charged with one felony count of workers' compensation premium insurance fraud. Bail was set at $50,000. If convicted, Nelson could face up to five years in prison and/or $50,000 in fines.

"Every company doing business in California is required to carry workers' compensation insurance for all employees," said Commissioner Poizner. "Not doing so puts employees at risk and creates an unfairly penalizes those who play by the rules. If you attempt to skirt the law, you will get caught, and you will pay."

An investigation conducted by the California Department of Insurance and the Santa Clara County District Attorney's Office revealed Nelson's alleged fraud. Worldwide Attractions and Monster Magic LLC are entertainment companies specializing in Halloween related attractions. It is alleged that Worldwide Attractions and Monster Magic LLC, under their parent company Blue Wave Holdings, committed workers' compensation insurance premium fraud by not reporting employees on payroll reports to their workers' compensation insurer, SCIF. It is also alleged that SCIF insured several Blue Wave Holding's subsidiary companies that failed to disclose other entities and operations they were involved in as required on the initial applications. Daniel Ethan Nelson is alleged to be the principle individual in charge of Blue Wave Holdings and its subsidiary companies.

CDI's initial investigation revealed that between January 2006 and December 2006, Worldwide Attractions/Monster Magic LLC purportedly intentionally underreported payroll to SCIF by as much as $77,164.11. The underreported payroll resulted in a premium loss to the company's insurer, SCIF, of approximately $11,255.55.

Evidence seized from Worldwide Attractions/Monster Magic LLC/Blue Wave Holdings bank accounts, revealed an additional $507,178.16 in payroll that was found to have been unreported to SCIF. The discovery of the additional unreported payroll increased the premium loss to SCIF to approximately $57,327.68.

The Santa Clara District Attorney's Office is prosecuting this case.

Commissioner Poizner oversees sixteen CDI Enforcement Branch regional offices throughout the state. Nearly 2,800 insurance fraud-related arrests have been made by CDI since Commissioner Poizner took office in 2007 - more arrests than have been made during any other three year period, under any previous insurance commissioner.

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