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Cal/OSHA Fines Companies $1.75M for Confined Space Fatality

Cal/OSHA fined a San Francisco Bay Area refinery and three contractor companies more than $1.75 million for safety violations following the November 12, 2021 death of a 35 year old worker, Luis Gutierrez, who suffocated while trying to clean a well.

Three of the four employers were cited with willful and serious violations after determining that they failed to follow confined space guidelines, including the failure to determine acceptable entry conditions for the employee, which resulted in exposure to an oxygen-deficient atmosphere.

A willful violation is cited when evidence shows the employer either knowingly violated the law or took no reasonable steps to address a known hazard. A serious violation is cited where there is a realistic possibility that death or serious physical harm could result from the actual hazard created by the violation.

San Antonio-based Valero bought the refinery in 2000, which processes crude oil into gasoline, diesel fuel, jet fuel and asphalt.

Shortly before midnight on November 12, 2021, the worker lost consciousness after descending into a regenerator overflow well at the Valerio Benicia refinery to evaluate the condition of the well interior and perform cleaning operations in advance of a welding crew.

He was found inside the regenerator suspended by fall protection equipment. A refinery emergency rescue team retrieved him. Benicia Fire Department and Valero Fire Department performed medical treatment on-site but were unable to resuscitate him.

Valero spokesperson Paul Adler confirmed the death and described the victim as a worker for a contractor. Cal/OSHA later confirmed that the contractor was JT Thorpe, a Richmond-based company.

Inspectors determined that a welding torch was left in the well that was leaking argon, an odorless gas that displaced oxygen inside the confined space.

Working in confined spaces is extremely dangerous, as is working with argon,” said Cal/OSHA Chief Jeff Killip. “The employers involved had a responsibility to keep their workers safe. The first step to preventing a completely avoidable fatality is to identify hazards before a worker enters a confined space.”

Confined space hazards exist in many workplaces. Employers must identify and label confined spaces, establish and maintain onsite emergency response plans, and provide training for workers and supervisors. Common types of confined spaces include tanks, silos, pipelines, sewers, storage bins, drain tunnels and vaults.

The fines given to the Valero Refinery totalled $528,750, Total Safety Specialty was fined $988,000, JT. Thorpe & Son, Inc. fine was $135,500 and finally T.R.S.C., Inc. was fined $101,125.

Among the violations were failure to: evaluate the workplace to determine if any spaces are permit-required confined spaces, ensure employees use equipment and safety precautions during the rescue of an employee, and monitor unauthorized entrants into workspaces.

Cal/OSHA has extensive informational materials on its website, including a confined space guide for general industry to help employers provide safe workplaces and ensure workers know these hazards.

Sedgwick Acquires Orchid Medical a National Care Service Provider

Sedgwick announced it has acquired Orchid Medical, a nationwide provider of ancillary medical management solutions for the workers’ compensation industry.

Orchid Medical was established in 2002 as a durable medical equipment (DME) and medical supplies provider. Subsequently it evolved into a national provider of integrated ancillary and surgical cost containment solutions specifically for the workers’ compensation industry.

Orchid Medical offers a broad range of services including Surgical Cost Containment Program® (SCCP), DME & supplies, prosthetics and orthotics, home health and complex care, modifications, diagnostic imaging, physical medicine, transportation and language, retrospective DME, long term care and urine drug testing. It is headquartered and fully operated in Orlando Florida.

Sedgwick says that this acquisition represents an investment in the continued growth of Sedgwick’s ancillary care network, which ensures that employees of the company’s workers’ compensation clients receive prompt, high-value service for durable medical equipment (DME), transportation, translation, home health, diagnostic imaging and other aspects of care on the road to recovery.

“Together with Orchid, we will strengthen our holistic approach to caring for clients’ injured and ill colleagues, helping them return to maximum health and productivity,” said Andrea Buhl, Sedgwick’s president of managed care.

“This acquisition enables us to provide employers with a single point of service for a broad range of ancillary care needs while strengthening our workers’ compensation and managed care capabilities and our commitment to taking care of people when they need us most.”

“By joining forces with Sedgwick, we’ll create a combined network of unparalleled reach and scope that will truly transform ancillary care for workers’ compensation,” said Paul Taylor, CEO of Orchid Medical. “Bringing together the brilliant minds and outstanding solutions of our two organizations means we can deliver the very best care available to employees of our valued clients.”

Inflation Triggers Increase in California Minimum Wages

The California minimum wage is currently $15 an hour for employers of 25 or more employees and $14 an hour for all employers of less than 25 employees. Federal law currently sets the minimum wage at $7.25 per hour. However, federal law allows states and cities to set a minimum wage that is higher than the federal rate.

There are some employees who are exempt from the California minimum wage law, such as outside salespersons, individuals who are the parent, spouse, or child of the employer, and apprentices regularly indentured under the State Division of Apprenticeship Standards.

Several local California jurisdictions have also passed minimum wage laws, such as San Francisco, San Jose, Los Angeles, San Diego, Oakland, and Berkeley, The University of California at Berkeley has compiled and maintains local city and county level minimum wage rates.

A 2016 statute signed into law by former Gov. Jerry Brown, Senate Bill 3, amended sections 245.5, 246, and 1182.12 of the Labor Code, and set forth a plan to gradually increase the statewide minimum wage to $15 per hour over the past six years. SB 3 also included a provision requiring an automatic increase in the minimum wage as determined by the Consumer Price Index..

The California state minimum wage law as amendedLabor Code 1182.12provides that the state minimum wage must increase to $15.50 per hour for everyone in 2023 if inflation increases by more than 7% between the 2021 and 2022 fiscal years. Thursday, the California Department of Finance said it projects inflation for the 2022 fiscal year – which ends June 30 – will be 7.6% higher than the year before, triggering the minimum wage increase.

Governor Newsom subsequently announced that all California employers will be required, regardless of size, to pay a new minimum wage of $15.50 per hour, effective January 1, 2023.

This development also increases the minimum salary for most exempt employees in California to $64,480 annually and $5,373.33 per month, effective January 1, 2023. This increase is most significant for smaller employers, who currently have a salary floor of $58,240 annually.

Finally, in other minimum wage developments, earlier last week supporters of California’s ballot initiative to raise California’s minimum wage to $18 per hour announced having submitted more than 1 million signatures – way beyond the 623,000 required to land it on the November ballot. If this ballot measure passes, and many expect that it will, the minimum wage in the Golden State would go to $16 per hour on January 1, 2023, and move up for all hourly employees annually until reaching $18 an hour on January 1, 2028.

“Increasing the minimum wage at this time of spiking prices is a just and urgently needed measure,” said David Huerta, president of SEIU California and SEIU-United Services Workers West. But according to the report by Cal Matters, some small business owners said it could further impede California’s economic recovery.

John Kabateck, state director of the National Federation of Independent Business California said “We recognize this is the law but this has the opposite effect on the people they’re trying to help.”

Ironically, Newsom on Thursday proclaimed May “Small Business Month” in California.

Murderer Serving Life Sentence is Lead Defendant in $2M EDD Fraud

Federal authorities just arrested five people linked to a ring that allegedly obtained at least $2 million in California unemployment insurance (UI) benefits – mostly pandemic-related relief – by using stolen identities, some of which belonged to California prison inmates.

The arrests were made following a 39-count indictment that charges 13 defendants in a scheme to use misappropriated personal identifying information (PII) to fraudulent apply for, and receive, unemployment benefits, mostly during the second half of 2020.

The lead defendant in the case is Natalie Le Demola, 37, who is currently serving a life prison sentence after she was convicted in 2005 of first-degree murder for killing her mother. The indictment also charges Carleisha Neosha Plummer, 32, of Los Angeles, who was a close associate of Demola in prison until she was paroled in July 2020.

DeMola has been serving a life sentence at the California Institution for Women since 2005 when she and her then-boyfriend, Terry Bell, were convicted of first-degree murder for beating her mother to death at their Corona, Calif., home in 2001. DeMola, who was 16 at the time, and Bell, who was 17, had plotted to kill her mother because she objected to them dating, according to news reports from their trial.

DeMola allegedly procured the personal details, including dates of birth and social security numbers, of other inmates and their visitors from a prison associate who had access to a database containing that info. She would then send the details on to her accomplices outside the prison who would use them to file for fraudulent unemployment benefits which they would have sent to mail boxes they controlled, prosecutors said.

Prison inmates are not eligible for unemployment benefits, but the gang would check boxes on the application stating they were not incarcerated, according to court documents.

The indictment charges all 13 defendants with conspiracy to commit wire fraud and bank fraud. The conspiracy count alleges 150 overt acts, including illegally obtaining PII, some of which was provided by an unnamed prison official employed by the California Department of Corrections and Rehabilitation.

The indictment names various defendants in 31 bank fraud counts and seven aggravated identity theft counts. The defendants named in the indictment are:

– – Demola, originally of Corona, who will be brought to federal court to face the charges in this case;
– – Plummer, 32, of Los Angeles, who was arrested today;
– – Khanshanda King, 31, of Los Angeles, who is still being sought;
– – Cleshay Johnson II, 28, of Los Angeles, who is still being sought;
– – James Antonio Johnson, who has several aliases including  “Big Dawg Niddy,” 31, of Los Angeles, who is currently in custody in a Los Angeles County jail;
– – Felicite Aleisha King, 41, of Los Angeles, who is still being sought;
– – Shafequah Lynete Mitchell, 33, of Los Angeles, who is currently traveling outside of California;
– – Loresha Shamone Davis, 31, of Moreno Valley, who was arrested today;
– – Porsha Latrice Johnson, 32, of Lynwood, who was arrested today;
– – Donisha Lashawn Pace, 38, of South Los Angeles, who was arrested today;
– – Dominique Charmone Martin, 37, of Yucaipa, who is still being sought;
– – Mykara Destiny Robertson, 23, of Los Angeles, who is still being sought; and
– – Amber Jane Wade, 34, of Palmdale, who was arrested today.

The conspiracy and bank fraud charges each carry a statutory maximum sentence of 30 years in federal prison. Aggravated identity theft carries a mandatory two-year consecutive sentence.

WCRI Studies Chiropractic Care for Workers with Low Back Pain

The Workers Compensation Research Institute (WCRI) announced the release of a new study on chiropractic care for low back pain. The study reveals substantial variation in the use of chiropractic care across 28 states and offers insights into the patterns and outcomes of chiropractic care.

“Chiropractors often participate in the delivery of physical medicine services for low back pain, but few workers received chiropractic care in states where employers or insurers control the selection of providers,” said John Ruser, WCRI’s president and CEO. “This study will be helpful for policymakers and stakeholders who are interested in re-evaluating the role of chiropractors, especially those who have been adopting evidence-based practices and contributing to cost-effective care.”

This study, Chiropractic Care for Workers with Low Back Pain, describes the prevalence of chiropractic care and provider patterns of physical medicine treatment for workers with low back pain. It provides some evidence as to how different provider patterns of physical medicine treatment are associated with variations in overall medical and indemnity costs, and the duration of temporary disability. The study also looks at the utilization of medical services, including magnetic imaging studies, opioid prescriptions, and pain management injections.

The following is a sample of the study’s key findings:

– – The prevalence of chiropractic care varied substantially across the 28 study states. States that give employers control of selecting medical providers were among the states with the lowest prevalence of chiropractic care.
– – When chiropractors are involved in care, they alone may provide physical medicine care or deliver physical medicine care in conjunction with other non-chiropractic physical medicine providers.
– – Based on the experience of 16 states with prevalent chiropractic care, 12 percent of workers with low back pain received physical medicine care exclusively from chiropractors, and 17 percent received physical medicine treatment from chiropractors and other non-chiropractic providers, concurrently or sequentially.
– – Claims with care provided exclusively by chiropractors were associated with lower costs and shorter duration of temporary disability than a set of claims with similar characteristics where care was exclusively provided by non-chiropractic providers.

The data used for this study are from the WCRI Detailed Benchmark/Evaluation database, which includes more than 2 million open and closed claims from 28 states, with injuries from October 1, 2015, through September 30, 2017, and detailed medical transactions up through March 31, 2019.

The 28 states are Arkansas, California, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

To learn more about this study or to download a copy, visit WCRI’s website. Dongchun Wang, Kathryn L. Mueller, Donald R. Murphy, and Randall D. Lea authored the study.

Three Face Charges for $128K State Fund Premium Fraud

Three Sacramento Area residents face charges of worker’s compensation premium fraud by allegedly manipulating their companies payroll resulting in a loss of nearly $128 thousand in State Compensation Insurance Fund premium.

Troy Williams, 49, of Angels Camp, Nanci Morman, 68, of Somerset, and John Allison, 63, of Rocklin, were arraigned on multiple felony counts of insurance fraud after a joint investigation with the California Department of Insurance and the El Dorado County District Attorney’s Office revealed the defendants allegedly conspired together to illegally lower their company’s workers’ compensation insurance premiums and defraud the State Compensation Insurance Fund.

Williams has owned and operated a framing business called Archer Building Company since 2001, which reported carpentry payroll between 2013 and 2016; however, in 2016 the company’s work-related claims costs increased, which would increase its worker’s compensation insurance rates.

The joint investigation found that Allison, an Archer Building Company employee, created Allison Development. Between 2016 and 2020, Archer Building Company diverted its carpentry payroll to Allison Development in order to avoid paying accurate workers’ compensation insurance premiums.

In 2020, Allison Development’s workers’ compensation policy was cancelled and the employees transferred back to Archer Building Company.

The investigation found Archer Building Company and Allison Development attempted to defraud State Fund of $127,795 by not paying the correct amount of premium. Also, it was revealed that Morman was the bookkeeper and point of contact for insurance audits for both companies.

On March 10, 2022, Williams and Morman self-surrendered to the El Dorado County Jail. Allison self-surrendered on March 14, 2022.

They are scheduled to return to court on May 26, 2022. The El Dorado County District Attorney’s Office is prosecuting this case.

California is Losing Legal Battles Over Corporate Director Diversity Laws

S.B. 826 requires that, by December 31, 2021, publicly held corporations in California have at least 1 female director if the number of directors is 4 or fewer, at least 2 female directors if the number of directors is 5, and at least 3 female directors if the number of directors is 6 or more.

Assembly Judiciary Committee analysis describes S.B. 826 as “essentially a quota system for private corporate boards. Should this bill be challenged, the State would confront a difficult challenge in showing a compelling government interest in requiring a gender-based quota system for a private corporation.” And their expectation of having “difficult” challenges seems to be the case.

In the most recent case, plaintiffs allege that S.B. 826 violates Equal Protection under Article I, Section 7 (aka Equal Protection Clause) and violates Equal Protection under Article I, Section 31 (the prohibition on discrimination based on sex in public employment, education or contracting) of the California Constitution.

Los Angeles County-based California Superior Court Judge Maureen Duffy-Lewis just found in her May 13, 2022 ruling, that S.B. 826 is unconstitutional under the Article I, Section 7, and thus the Court “need not make any determination as to plaintiffs’ second count under Article I, Section 31 in the case of Crest v Padilla, 19STCV27561 (May 13, 2022).

The first prerequisite to a meritorious claim under the equal protection clause is a showing that the state has adopted a classification that affects two or more “similarly situated” groups in an unequal manner. When a statute makes express use of a suspect classification, a plaintiff challenging the statute meets their initial and ultimate burden simply by pointing out the classification. The statute is presumed to be unconstitutional, and the government bears the burden of demonstrating otherwise.

The Court found that the Plaintiffs carried their burden to prove that men and women are similarly situated for purposes of S.B. 826’s gender-based quota.” As Plaintiffs have demonstrated that S.B. 826 is presumptively unconstitutional, thus the burden shifted to the defendant to prove that S.B. 826 satisfies strict scrutiny.

To meet the strict scrutiny test, the defendant must show (1) a compelling state interest, (2) that S.B. 826 is necessary and (3) that S.B. 826 is narrowly tailored. The strict scrutiny standard applies even if a law is claimed to be remedial.

Defendant claimed three compelling state interests: (1) S.B. 826 was passed to eliminate and remedy discrimination in the director selection process for publicly held corporate boards in California. (2) S.B. 826 was passed to increase gender diversity on the boards of publicly held corporations to benefit the public and the state economy. (3) S.B. 826 was passed to increase gender diversity on publicly held corporations headquartered in California to benefit and protect California taxpayers, public employees and retirees.

However in her Opinion, Judge Duffy-Lewis said “Generalized assertions of discrimination in a particular region or industry are insufficient to give rise to a compelling governmental interest, as are mere statistical anomalies, and the discrimination must be identified with specificity.”

She went on to say that “S.B. 826’s goal was to achieve gender equity or parity; its goal was not to boost California’s economy, not to improve opportunities for women in the workplace nor not to protect California’s taxpayers, public employees, pensions and retirees.”

The Court considered all evidence but concluded “a Compelling State Interest is lacking.”

Tom Fitton, president of good-government group Judicial Watch, which represented the plaintiffs in court, welcomed the decision by Duffy-Lewis. Fitton noted that this was the second recent California court decision finding that quotas for corporate boards are unconstitutional.

On September 30, 2020, California Governor Gavin Newsom signed AB 979 (Corporations Code§ 301.4) into law on the heels of SB 826. It had similar provisions for the protection of members of “underrepresented” communities rather than women. On the same day that AB 979 was passed in September 2020, three California taxpayers filed a lawsuit against the Secretary of State in Los Angeles County Superior Court. .

In that case, also cited as Crest v. Padilla – 20 STCV 37513 (April 1, 2022), Los Angeles County-based California Superior Court Judge Terry A. Green ruled on April 1 that the law “violates the Equal Protection Clause of the California Constitution on its face.”

Sacramento-based Pacific Legal Foundation (PLF), a public interest law firm, is also pursuing similar litigation in federal court in California. Its lawsuit was filed on Nov. 22, 2021, in the U.S. District Court for the Eastern District of California. That case was dismissed by the trial judge who found that a shareholder has no standing to challenge the law.

But, in a unanimous published opinion, the Ninth Circuit Court of Appeals reversed, and held that a shareholder of a California company has standing to sue in the case of Meland v Weber 2 F.4th 838 (2021)

O.C. Physician Assistant Sentenced for Selling Blank Opiod Prescriptions

A former physician assistant at a Fountain Valley medical clinic was sentenced to 46 months in federal prison for conspiring to issue and sell prescriptions for oxycodone, a highly addictive opioid painkiller, without a medical purpose, to drug dealers, knowing the drugs would be sold on the street.

56 year old Raif Wadie Iskander, formerly of Ladera Ranch, but who now resides in Ennis, Montana, was sentenced by United States District Judge James V. Selna. He was a graduate of Stanford University, and became a licensed physicians assistant in 2011.

Iskander pleaded guilty in November 2020 to one count of conspiracy to distribute oxycodone.

From 2018 to April 2019, Iskander, who was a licensed physician assistant in California, wrote prescriptions for purported “patients” he had never met or examined. Iskander provided to drug dealers multiple paper prescriptions that he had signed, but with the patient names left blank, to be filled in by drug dealers later.

Iskander wrote fraudulent oxycodone prescriptions for two co-defendants – Adam Anton Roggero, 36, of Costa Mesa and Johnny Gilbert Alvarez, 42, a.k.a. “M.J.,” of Santa Ana, who sold the prescribed drugs on the street as well as to an undercover officer.

Iskander knew that the oxycodone filled from the prescriptions would be sold to drug customers who were not using the oxycodone for legitimate medical purposes and whom he had never met or examined.

Alvarez pleaded guilty in November 2021 to one count of distribution of methamphetamine and is scheduled to be sentenced on June 13.

The Drug Enforcement Administration, the Costa Mesa Police Department, and the California Department of Health Care Services investigated this matter.

Assistant United States Attorney Rosalind Wang of the Santa Ana Branch Office prosecuted this case.

Probation ends Nurse’s Controversial Conviction for Medication Error

After a three-day trial that gripped nurses across the country, former nurse, 38 year old RaDonda Vaught, was convicted in Tennessee of two felonies, gross neglect of an impaired adult and negligent homicide, and is facing eight years in prison for a fatal medication mistake. She was scheduled to be sentenced on May 13.

She was arrested in 2019 in connection with the killing of Charlene Murphey, who died at Vanderbilt University Medical Center in late December 2017. Murphey was prescribed a sedative, Versed, to calm her before being scanned in a large, MRI-like machine. Vaught was tasked to retrieve Versed from a computerized medication cabinet but instead grabbed a powerful paralyzer, vecuronium.

Vaught overlooked several warning signs as she withdrew the wrong drug – including that Versed is a liquid but vecuronium is a powder – and then injected Murphey and left her to be scanned. By the time the error was discovered, Murphey was brain-dead.

Court House News reports that she was sentenced to three years of probation Friday as hundreds of health care workers rallied outside the courthouse, warning that criminalizing such mistakes will lead to more deaths in hospitals.

A state judge imposed the sentence on RaDonda Vaught after she apologized to relatives of the victim, Charlene Murphey, and said she’ll be forever haunted by her mistake. Vaught was found guilty in March of criminally negligent homicide and gross neglect of an impaired adult after she accidentally administered the wrong medication.

Nashville Criminal Court Judge Jennifer Smith said Vaught would receive judicial diversion, a way for first-time offenders to have their charges dropped and their records expunged after successfully completing probation. Prosecutors had argued against diversion, although they were not opposed to probation.

The crowd of nurses outside protesting cheered, cried and hugged after hearing the sentence. The relief came after the health care workers spent hours in the sun and clung to every word of the judge’s lengthy sentencing explanation, some linked in a chain with hands locked.

The fact that Vaught, 38, faced any criminal penalties at all has become a rallying point for many nurses who were already fed up with poor working conditions exacerbated by the pandemic. The crowd outside listened to the hearing through loudspeakers and cheered when some of the victim’s relatives said they wouldn’t want jail time for Vaught.

In weighing whether to grant Vaught judicial diversion, Judge Smith cited Vaught’s remorse as well as her honesty about the medication error.

After Vaught was found guilty in March, health care workers began posting to social media that there were leaving bedside nursing for administrative positions, or even quitting the profession altogether. They said the risk of going to prison for a mistake has made nursing intolerable.

On Friday, Vaught’s supporters wore purple T-shirts reading “#IAmRaDonda” and “Seeking Justice for Nurses and Patients in a BROKEN system,” as they listened to speeches from other nurses and supporters. They also held a moment of silence to remember Charlene Murphey.

Vaught reported her error as soon as she realized what she had done wrong – injected the paralyzing drug vecuronium instead of the sedative Versed into 75-year-old Charlene Murphey on Dec. 26, 2017.

Vaught admitted making several errors that led to the fatal injection, but her defense attorney argued that systemic problems at Vanderbilt University Medical Center were at least partly to blame.

Multiple Carriers to Share $2.4M Restitution Order After Fraud Conviction

The San Bernardino District Attorney’s office reported last week that the proprietor of a San Bernardino-area janitorial business found guilty of fraud last year was ordered to pay over $2.4 million in restitution this March while serving two years of felony probation.

45 year old Almirante Perez of Highland  was ordered to pay $2,407,573.14 in restitution for committing workers’ compensation and tax fraud. Perez was the owner of Capital Janitorial Services, Cal Best Service Group Inc., Southern Pacific Janitorial Group and United Pacific Contractors Inc., from March 2013 to November 2018

Over multiple years, Mr. Perez committed workers’ compensation and tax fraud by failing to fully insure his employees for workers’ compensation and underreporting his employee payroll. He  was arraigned on multiple felony counts of insurance fraud and tax evasion. .

An investigation by the Department of Insurance revealed Perez failed to report employees and wages to his workers’ compensation insurance carrier and to the Employment Development Department (EDD). The investigation discovered $1,982,597 in underreported premium fraud and $609,430 in payroll taxes owed to the EDD.

It is further alleged, as to some of the counts, that the offenses alleged are related felonies, a material element of which is fraud and embezzlement, which involved a pattern of related felony conduct, and the pattern of related felony conduct involved the taking of, and resulted in the loss by Republic Underwriters Insurance Company, NorGuard Insurance Company, dba Atlas General Insurance Company, and Ohio Security Insurance Company of more than five hundred thousand dollars ($500,000).
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He pleaded no contest to one count of felony workers’ compensation fraud with a criminal enhancements for aggravated white collar crime. He admitted he had failed to pay for workers’ compensation insurance and was underreporting payroll for multiple years, district attorney’s officials said. He was placed on felony probation for the maximum period of two years last May.

The $2,407,573.14 in restitution will be paid to multiple victims, including the Employment Development Department, Republic Underwriters, Berkshire Hathaway and Liberty Mutual.