A San Diego grand jury has indicted the owners of Good Neighbor Services as well as six accomplices for a massive, ongoing insurance fraud and tax evasion scheme. Two defendants, Hyok “Steven” and Woo “Stephanie” Kwon, own a janitorial company that provides cleaning staff to major hotels across San Diego, Los Angeles and Riverside Counties, including The Hotel Del Coronado, Loews Coronado, La Costa Resort and Spa, The Grand Del Marin La Jolla, L’Auberge Del Mar, The Ritz Carlton, Four Seasons, Hilton and Hyatt hotel chains.
The Kwons have been indicted on 11 counts of workers’ compensation premium fraud, 18 counts of payroll tax evasion and one count of extortion. The investigation uncovered a methodical and systematic shell game involving six straw owners. These straw owners were used to conceal the existence of hundreds of hotel workers to avoid paying millions of dollars in insurance premiums and payroll taxes. If convicted of all charges, they each face up to 31 years in prison.
Six co-defendants have also been charged with workers’ compensation premium fraud and tax evasion. They are Melquiades Brizuela Jr, Manuel Rodriguez, Veronica Lucas Cuin, Aimee Sunmyung Kwon, Daniel Kwon and Hyun Bung Chae for their involvement in the scheme. They face sentences between six and eight years in prison.
For nearly a decade, Good Neighbor Services allegedly concealed their real payroll information in order to fraudulently obtain workers’ compensation insurance from multiple companies including Travelers, Norguard, AIG, Southern Insurance, Everest National, Preferred Employers, State Compensation Insurance Fund and Employers Compensation Insurance. In doing this, the company avoided paying more than $3.6 million in insurance premiums and evaded paying over $3.3 million in payroll taxes.
Employees who were interviewed said they were paid with checks bearing the name of businesses other than Good Neighbor Services throughout the course of their employment,even though they wore uniforms with the Good Neighbor Services’ logo and identified the Kwons as the owners. The employees also said they did not receive overtime pay or workers’ compensation benefits when they were injured on the job, and they feared retaliation if they reported their injuries. One employee said she had to repeatedly ask for medical attention for her injury. When she was finally sent to a doctor, she found out later the Kwons sent her to a dentist rather than a physician.