$30M Workers’ Comp Fraud Scheme Uncovered in California

Two business owners have been charged in a workers' comp fraud scheme involving farm labor contractors in California's Central Valley.
By: | June 17, 2024

A workers’ compensation insurance fraud scheme worth nearly $30 million has been uncovered in Kings County, California, with two individuals arraigned on multiple felony charges, according to the California Department of Insurance.

Ruben Perez Mireles Jr., 49, and John Mena, 29, allegedly underreported $29.2 million in payroll for multiple businesses, including two farm labor contracting companies, to illegally save on workers’ compensation insurance premium and taxes. The state found Mireles underreported $7.6 million in employee payroll to his insurance carrier, resulting in a premium loss of $1.7 million.

Mireles then established another company, Calzona Ag Management, Inc., and with Mena, underreported $8.8 million in payroll, causing an additional premium loss of $1.8 million.

Insurance Commissioner Ricardo Lara stated, “When business owners illegally underreport payroll, they are hurting legitimate businesses and California consumers who pay the price through higher insurance premiums.”

Furthermore, Mireles underreported $12.8 million in payroll to the California Employment Development Department and failed to report personal income to the Franchise Tax Board, resulting in a combined loss of approximately $3 million for unpaid tax liability, penalties, and interest.

The pair’s fraudulent activities defrauded their insurance carriers, EDD, and FTB out of over $6.5 million, according to regulators.

Mireles also fraudulently obtained a COVID-19 Paycheck Protection Program loan and was sentenced to one year in prison. He faces additional felony charges for his role in a previous workers’ compensation insurance fraud scheme. Mena has been charged with three felony counts of workers’ compensation insurance fraud and one felony count of grand theft.

The Central Valley Workers’ Compensation Fraud Task Force, an inter-agency anti-fraud partnership, led the investigation. The case is being prosecuted by Kings County District Attorney Sarah Hacker. &

The R&I Editorial Team can be reached at [email protected].

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