Men Charged In $18 Million Workers' Comp Scheme

                               Los Angeles, CA (CompNewsNetwork) - Insurance Commissioner Steve Poizner today announced that two Southern California men have been charged with conspiring to defraud the State Compensation Insurance Fund (State Fund) of more than $18 million.  David Zahler, 52, of Huntington Beach, and David Tai, 66, of Hacienda Heights, surrendered to police on November 26, following a two and a half year CDI investigation.

"I will not stand for scam artists taking advantage of the system," said Commissioner Poizner.  "The Department of Insurance will continue to track down and help prosecute anyone who seeks to defraud insurance companies or consumers."

Zahler and Tai allegedly conspired to defraud the State Fund of over $18 million in insurance premiums they owed for the worker's compensation policy issued to Staffing Services, Inc., a temporary employment company with thousands of employees.  It is alleged that the men purposely misrepresented the types of employees for which they obtained workers comp coverage, in order to pay $18 million less in premium payments.  Zahler was the Chief Executive Officer and Tai the Chief Financial Officer for Staffing Services.  Staffing Services Headquarters is located in the City of Bellflower.

CDI launched an investigation into Staffing Services after State Fund notified the California Department of Insurance of this suspected fraud.  The investigation revealed that David Zahler and Tai were allegedly providing false information to the State Compensation Insurance Fund to fraudulently obtain workers' compensation insurance coverage for $18 million less than should have been due for their insurance coverage.

Zahler and Tai each face up to 20 years in prison and up to $40 million in fines if they are convicted of these crimes.  The Los Angeles District Attorney's Office is prosecuting this case.