Los Angeles, California Enterprise Proprietor Arraigned In $1 Million Employees’ Compensation Fraud Scheme, Division of Insurance coverage Studies

April 15, 2021 – LOS ANGELES, California – Marion Piggee, Jr., 68, of Los Angeles, was charged with seven cases of insurance fraud following an investigation The California Department of Insurance announced that he allegedly undercut his employees’ payroll by nearly $ 6 million in an attempt to fraudulently lower his company’s employee compensation insurance premium by over $ 1 million.

On November 28, 2016, the State Compensation Insurance Fund (SCIF) filed an alleged fraudulent claim with the Department of Insurance for potential insurance fraud. SCIF reported that Piggee, as the owner of the Center for Behavioral Change, an adult care facility, is allegedly under-reporting employee payrolls in an attempt to lower the reasonable rate of insurance premiums owed to SCIF.

A routine check for the insurance period from November 1, 2014 through November 1, 2015 found that the Center for Behavioral Change had an employee and a wage of $ 8,035. However, the audit found that wages for the same insurance year were $ 881,593. It also revealed that Piggee’s company had taken out workers’ compensation insurance for one facility, but did not disclose that it had also purchased eight other facilities.

The investigation found that Piggee allegedly failed to adequately report the company’s payroll from November 2009 to May 2016. The investigation also found that the Center for Behavioral Change had 60 employees, although only one employee was reported. The company reported underreporting of $ 5,982,410, resulting in a premium loss for SCIF of $ 1,017,937.

Piggee was tried in the Los Angeles Supreme Court on April 6, 2021. This case is being prosecuted by the Los Angeles District Attorney’s Office.
Source: CA. Insurance department