41 year old Carolyn Plaza, who lives in Fresno, self-surrendered after a warrant for her arrest was issued on six felony counts of insurance fraud.

A criminal complaint filed on April 16 , alleges Plaza underreported more than $3 million in employee payroll in order to fraudulently reduce her company’s workers’ compensation insurance premium by nearly $1 million.

Plaza is the co-owner of Absolute Urethane, Inc., a construction contracting business serving the Fresno and surrounding Central Valley areas since 2006.

The California Department of Insurance began an investigation after receiving a tip from the State Compensation Insurance Fund alleging Plaza had manipulated payroll reports to avoid paying higher insurance premiums.

The Department of Insurance investigation uncovered that Plaza had provided false payroll records to State Fund for multiple policy years.

After comparing those payroll records to the records she reported to the Employment Development Department, the investigation discovered that Plaza underreported $3,146,863 in employee payroll over five years. Plaza’s underreporting resulted in a $985,091 loss in premium to State Fund.

Employers are required to maintain workers’ compensation insurance to cover their employees in the event of an accidental on-the-job injury. To ensure proper coverage, employers are required to accurately report the number of employees, job classifications, and the amount of payroll expended.

One of the common ways in which employers avoid paying insurance premiums is to underreport a business’s payroll by providing false payroll reports to their insurance company.

In this case, Plaza’s underreporting significantly lowered the premiums owed. Businesses that fraudulently lower their premiums benefit from an unfair market advantage, giving them the ability to charge less in labor costs, and thereby underbid businesses who pay the appropriate premiums.

Arraignment is scheduled for June 28, 2021, in the Fresno County Superior Court. The Fresno County District Attorney’s Office is prosecuting this case.