American Labor Alliance (ALA) and CompOne USA are subsidiaries of Agricultural Contracting Services Association, which is a Nevada not-for-profit corporation headquartered in Clovis, Calif.,

The ALA attracted customers by marketing low workers’ compensation premium rates. Its membership surged after it introduced its workers’ comp benefit. It had more than 400 employers with 30,000 members as of February 2017. Two-thirds of those employees are seasonal agricultural workers employed by roughly 50 farm labor contractors.

A number of other business entities were affiliates or subsidiaries of ALA, including CompOne USA, ALA Trust, California Analytics, Farmworkers Enterprise Foundation, Recruiters of America, CompassPilot, ALTA, and Life Abundantly/”LiBu.”

The California Insurance Commissioner issued a Decision and Order imposing a $4,345,000 penalty on American Labor Alliance and CompOne USA for selling workers’ compensation and liability policies to employers of farmworkers without being properly licensed with the Department of Insurance.

FBI agents on behalf of the U.S. Department of Labor served warrants for workplace injury benefit program records in July 2017 at the headquarters office of American Labor Alliance.

Prosecutors have now filed a Grand Jury indictment against American Labor Alliance, Marcus Asay the Co-Founder, chairman, and controlling individual behind ALA. And Antonio Gastelum who served a variety of supervisory roles regarding ALA, including at various times serving as ALA’s chief operations officer, overseeing legal compliance matters for ALA, and controlling a number of ALA’s financial affairs, working directly under defendant Asay.

In addition to selling workers’ compensation insurance, the Indictment claims that from at least 2011 onward, defendant ALA offered what it purported to be a retirement pension plan to its clients, known by a variety of names including the “ALA Trust,” the “ALA Retirement Plan Trust,” or the “ALA Retirement Plan & Trust.” (ALA Trust).

The defendants caused ALA to issue Certificates of Liability to the clients that purported to provide “Workers Compensation and Employers’ Liability” coverage. The defendants further caused the Certificates to list one or more of the National Insurance Companies as “insurers.” The Certificates were signed by defendant Asay.

Prosecutors allege that “Defendants caused the Certificates to contain materially false and fraudulent statements. The National Insurance Companies did not provide Workers’ Compensation insurance to ALA’s clients as the defendants purported in the Certificates. In some cases, the National Insurance Companies had issued liability policies or bonds to ALA itself, but would not have paid Worker’s Compensation benefits to any ALA client whose employee was injured or died.“

“In many of these cases, ALA-issued Certificates of Liability that contained a false policy number, not the real policy or bond number that pertained to ALA’s corporate coverage.”