Paso Robles business owner arrested for insurance fraud

May 16, 2014

drywalA Paso Robles man was arrested last month for allegedly failing to correctly report his employee payroll to the State Compensation Insurance Fund, according to a press release.

San Luis Obispo County District Attorney’s Office investigators arrested Jay Scott Silva, 53, the owner of Drywall Dynamics. The investigators then booked him into the San Luis Obispo County Jail on two felony counts of workers’ compensation insurance fraud.

“Premium insurance fraud is not a victimless crime,” said Insurance Commissioner Dave Jones. “Actions like Silva’s are what artificially inflate costs to insurers, consumers and California taxpayers. The Department of Insurance is committed to working with other allied agencies to combat the multi-billion dollar enterprise that is fraud.”

The California Department of Insurance began its investigation after the Carpenters/Contractors Cooperation Committee notified the department’s fraud division of Silva’s improper conduct regarding employee wages. Department investigators determined Silva was incorrectly reporting employee payroll, which reduced his rate of paid premium by $67,000.

“Workers’ compensation premium fraud hurts hard working men and women trying to make a living and feed their families,” said David Kersh, Executive Director of the Carpenters/Contractors Cooperation Committee. “It hurts honest employers that play by the rules and want to create good paying employment opportunities in our communities. In addition to the issue of premium fraud, Drywall Dynamics had also cheated its workers out of hundreds of thousands of dollars in wages.

“We applaud the work done by the Department of Insurance in cracking down on construction contractors that break the law.”

If convicted Silva faces a maximum of five years in jail, possible fines and full restitution. Silva posted a $30,000 bail and was released.


9 Comments

  1. standup says:

    State Fund is a racket period. In ten years, We have only had a few minor accidents that resulted in only a few days of lost time for our employees. Our comp rate in the tree business is 40%. Ten years ago it was 49% then dropped all the way down to 25%. A year later, it was back to 40% all due to the screwed up rating underwriters. They base our rate on ALL tree trimming accidents reported even if they only involved a stupid homeowner injuring or killing himself because he refused to hire a professional. Now that makes a lot of sense. It is also next to impossible to get a premium modification when you are a small business so trying to compete with large companies puts you at a further disadvantage. If we get to the point of civil war, I will want to go after all our worthless politicians and government employees, attorneys, and insurance underwriters not necessarily in that order. Just so you know, I sent in our comp payment yesterday for three (3) employees for the month of May for $2800.00. We have a full on documented safety program which keeps our accidents very low but it doesn’t lower our rates. We still have to pay for all the idiot companies who have many accidents. The system is as corrupt as it gets. It doesn’t just cost me but it costs all our clients in the long run. I won’t even get into some of our competitors who pay in cash and avoid comp altogether.

    Like or Dislike: Thumb up 12 Thumb down 0

  2. LameCommenter says:

    Many have sold or abandoned businesses due to WC costs. It’s a racket filled with fraud. I had one guy on “light lifting” (he couldn’t touch anything over five pounds in a job that involved just ten minutes of lifting per shift when the truck came in) the average was under fifteen pounds. He dragged this thing out for over a year. I went to nearly every hearing, tried to be a helpful but aware employer. What a joke.

    Mid year, we caught him on VIDEO tape moving his family with a U-Haul! It was a thumb “injury” on the job, so the video PROVED NOTHING AND CHANGED NOTHING. It was said by the ALJ that he was probably careful about his thumb ! Video dismissed.

    During lunches which I paid for serving the entire small crew, he would SOLICIT others to use his same WC lawyer and create a claim, “come on, get on the band wagon”. Multiple employees reported his solicitations to me.

    This is just ONE of years of claims. Never had a broken bone, never a stitch or puncture, just “soft tissue injuries” absolutely FAKED by a pathetic percentage of employees of mine.

    I’m not condoning fraud by an employer, however unless you are a California employer in an urban environment, or you know one closely and personally, the average Californian has ZERO idea of the level of fraud, lawyering, and expense that goes with this fraud-laced costly hotbed of dishonesty system.

    WC lawyers are beneath contempt, the foul scum of the earth. Nothing but enablers for the dishonest system-suck employee. Ditto for WC doctor mills. Molesters with law degrees.

    Like or Dislike: Thumb up 11 Thumb down 1

  3. OnTheOtherHand says:

    I abandoned a business many years ago because of spiraling overhead costs. Worker’s Comp was the biggest element of that. I understand the need for the system and have no problem with it being required. However, the high costs are due to more than just fraud.

    There was an assumption on the part of the insurer that any injury that could be blamed, even indirectly, on the work involved was a no-contest approval of payment unless definitive proof that the injury was caused solely by another cause was provided. The work my employees did required heavy lifting. The insurer took the approach that this caused enough strain so that even off-the-job back injuries were likely due in part to it. One such injury resulted in enough added costs to the insurer that my rates went up by about 10% of the wages of each of my employees. That is not a minor cost when employee-related expenses were over half of the business operating costs.

    I was told that they wouldn’t fight such claims because the legal costs to do so were so high and the chances of success were too low to make it worth the effort. I often wondered if they factored in the likelihood of increased claims due to such generosity. Since they could pass on the costs back to the employer in the form of higher premiums, I doubt it.

    There is also a more subtle form of fraud in the Workers’ Comp. system. After the medical costs are covered, they also pay for retraining any workers who can’t be re-employed by the employer because of their injuries. This retraining of two of my ex-employees did them absolutely no good — at high cost to me. Either they were poorly evaluated for what they could do or the training was very poor quality.

    Like or Dislike: Thumb up 11 Thumb down 0

  4. Seminole1 says:

    There are numerous contractors who are exempt from workers comp because they have no employees. This is strange to me, as I am a licensed drywall contractor who performs on all sizes of jobs which require me to have WC insurance because I have employees. I compete against these contractors, who I know have to have employees or somebody perform the work there doing(the work can’t be done by a single person, drywall is a two-three man minimum project). There are people like Mr Silva in every subcontractor field trying to buck the system and its good to know that something is being done about. If I’m bidding against contractors who do not have WC, I’m at a significant disadvantage. Level the playing field, play by the rules, and let’s all compete legitimately. Karma always gets ya!

    Like or Dislike: Thumb up 6 Thumb down 1

  5. Mr. Holly says:

    Let me get this straight. Mr. Silva is accused of defrauding an insurance company for $67,000 and may be subject to a 5 year prison sentence.
    Kelly Gearhart defruaded hundreds of people out of $100,000,000 and MAY spend 11 years in prison.
    There is something really wrong here. In Kelly’s case it looks like crime may pay off well. While Mr. Silva, a small fish in the system, may really be the victim.

    Like or Dislike: Thumb up 21 Thumb down 0

  6. Cindy says:

    “Workers’ compensation premium fraud hurts hard working men and women trying to make a living and feed their families,”

    That’s a “SELF SERVING” lie. The insurance company charges premiums based on (among other things) the hours that each employee works. Workmans Compensation Insurance can be very high and every $ they demand based on a man’s wages decreases the amount of money the employer can afford to pay the employee.

    Like or Dislike: Thumb up 15 Thumb down 4

  7. womanwhohasbeenthere says:

    According to the CA Contractors State License Board website, http://www.cslb.ca.gov, Mr.Silva hasworkers comp insurance with Everest National and never had it with State Fund. He was exempt from having workers comp insurance for a long time because he had no employees – thanks no doubt to the recession.

    Let’s at least get a few facts straight. An error like that makes me question what is going on here. What job was he on? Was it a public works project? Who was/is the general contractor who is supposed to keep track of all this? Did Mr. SIlva get the job over a union firm so the unions went after him in retaliation?

    This sounds like a self-serving union press release and I am disappointed that Cal Coast News did not do more checking before running this.

    Like or Dislike: Thumb up 27 Thumb down 6

    • MaryMalone says:

      “Self-serving union press release”?

      Did you ever stop to think that perhaps he falsely reported that he had no employees? Thu as would qualify as incorrectly reporting employee payroll.

      Sheesh.

      Like or Dislike: Thumb up 6 Thumb down 14

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