Los Angeles, Calif. Business owner indicted under million-dollar workers’ compensation package, Department of Insurance reports
April 15, 2021 – LOS ANGELES, Calif .– Marion Piggee, Jr., 68, of Los Angeles, was arraigned on seven counts of insurance fraud after an investigation by California Department of Insurance has revealed he allegedly underreported employee payrolls by nearly $ 6 million in order to fraudulently reduce his company’s workers’ compensation insurance premium by more than $ 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. The SCIF reported that Piggee, as the owner of the Center for Behavioral Change, an adult residential care facility, allegedly underreported employee payrolls in order to reduce the appropriate rate of insurance premiums owed to SCIF.
A routine audit for the insurance period from November 1, 2014 to November 1, 2015 revealed that the Center for Behavioral Change reported an employee and salaries of $ 8,035. However, the audit found that salaries amounted to $ 881,593 for the same policy year. It also showed that Piggee’s company had obtained workers’ compensation insurance for one facility, but did not disclose that it had acquired eight other facilities as well.
The investigation revealed that Piggee allegedly underreported the company’s payroll from November 2009 to May 2016. The investigation also found that Center for Behavioral Change had 60 employees, despite the fact that they had not reported only one employee. The company underreported payroll by $ 5,982,410, which resulted in a loss of bonuses for SCIF of $ 1,017,937.
Piggee was arraigned in Los Angeles Superior Court on April 6, 2021. This case is being pursued by the Los Angeles County District Attorney’s Office.
Source: CA. Insurance Department