SACRAMENTO, Calif., April 24, 2012 /PRNewswire/ -- An April 23 press release issued by California Insurance Commissioner Dave Jones announced the owners of Hallmark Roofing of Belmont, were arrested on 29 felony accounts for workers' compensation and unemployment insurance fraud, including failure to report employee wages. After investigations and a forensic audit by the California Department of Insurance, owners John and Camille Applegate were found to have inaccurately reported their employees' wages, thereby failing to pay nearly $630,000 in workers' compensation insurance premiums over a five-year period. The Applegates' also neglected to report employees' wages and pay taxes on those wages to the Employment Development Department (EDD) between January 1, 2010, and January 1, 2012, even though they deducted the wages from their employees. If convicted, John and Camille Applegate each could face up to five years in state prison and payments in excess of $1 million.
Following the announcement of the Applegates' arrest by Commissioner Jones, California specialty contractors and California Professional Association of Specialty Contractors (CALPASC) Executive Director Brad Diede issued this statement:
"The pursuit and arrest of Hallmark Roofing's owners reinforces the goal of ethical contractors to eliminate the underground economy and level the playing field.
"This is a statewide problem that impacts all trades, not just roofing contractors. Every community in California has legitimate contractors from which builders, general contractors and owners can choose. We cannot allow unethical, corrupt contractors to get away with cheating the state out of millions of dollars while stealing business from law-abiding contractors.
"Principled, decent contractors need the vigilant eye and actions of the Department of Insurance to continue coordinating with other state agencies in cracking down on the underground economy.
"We commend Commissioner Jones for recognizing the problem of noncompliant contractors stealing work from legitimate contractors and appreciate the action his department is taking.
"CALPASC's LEVEL Program promotes interaction with state agencies, other associations and legitimate contractors to expose construction contractors who violate the law and cause legitimate contractors to lose their livelihoods by creating an unlevel playing field of unfair competition."
SOURCE California Professional Association of Specialty Contractors (CALPASC)