The Covid-19 pandemic has forced companies to rethink the way people work. To stem the spread of the disease, companies recognized the need to decentralize their staff. Working from home became the new standard. One major corporation after another announced their plans for remote work. Some companies, such as Twitter, provided the chance for staff to work remotely forever.

Maintaining large office spaces in cities, such as New York and San Francisco, is extremely expensive and the taxes are astronomical. Having people work from their own homes or in lower-cost cities is an attractive option for the chief financial officers to shave off large expenditures and save money.

Forbes reports that Stripe, the fast-growing fintech payments company, has an interesting deal for its employees. They could be paid $20,000 to relocate from high-priced cities to lower-cost locations. Sounds good, right? Here’s the catch – the workers who take up the offer will have to take a 10% cut to their compensation.

In addition to Stripe, other companies have made similar-type offers. VMware – a California-based publicly traded software company that provides cloud computing and virtualization software and services – announced that employees who work remotely will get a pay cut if they move out of Silicon Valley to live in less-costly cities.

According to Bloomberg, “employees who worked at VMware’s Palo Alto, California, headquarters and go to Denver, for example, must accept an 18% salary reduction. Leaving Silicon Valley for Los Angeles or San Diego means relinquishing 8% of their annual pay.” Rich Lang, VMware’s senior vice president of human resources, offered a positive alternative. When a person relocates and works remotely, they “could get a raise if they chose to move to a larger or more expensive city.”

Facebook CEO Mark Zuckerberg vowed to allow his employees to continue working remotely. Zuckerberg said, “We’re going to be the most forward-leaning company on remote work at our scale.” Employees will have to tell their bosses if they move to a different location. Zuckerberg forewarned his personnel, saying those who flee to lower-cost cities “may have their compensation adjusted based on their new locations.” The chief executive added, “We’ll adjust salary to your location at that point. There’ll be severe ramifications for people who are not honest about this.”

Just as there is heated debate over reopening the economy too quickly, there are contradicting actions of leading corporations that reflect a reticence to fully embracing the work-from-home revolution. Google, Amazon and Facebook have recently leased, built or purchased corporate real estate, bucking the remote movement. They are playing it safe by both offering people the chance to work from home, but also expanding their office footprint – in case the work-from-home trend slowly dissipates.

Two California men admitted to participating in a conspiracy to broker patients as part of a multi-state patient scheme in which one of them directed recruiters to bribe drug-addicted individuals to enroll in drug rehabilitation and the other paid referral fees from his rehabilitation center in exchange for those patient referrals.

Dr. Akikur Mohammad, 57, of West Hills, California pleaded guilty to one count of conspiracy to violate the Eliminating Kickbacks in Recovery Act (EKRA). Kevin M. Dickau, 32, of Tustin, California pleaded guilty to one count of conspiracy to commit health care fraud.

According to the Medical Board of California records, Mohammad is a board certified psychiatrist specializing in addiction. He has a private practice seeing mostly patients suffering from addiction or a dual diagnosis of addiction and another psychiatric disorder. In addition to his private practice, he founded two drug rehabilitation facilities, one in Agoura Hills, and the other in Malibu.

EKRA, enacted by Congress in October 2018 as part of a broader package of legislation aimed at combatting the opioid crisis, bars the payment of kickbacks in exchange for the referral of patients to drug treatment facilities. Mohammad’s EKRA conviction is among the first such convictions in the country using the new charge.

Three other individuals have previously pleaded guilty for their roles in the scheme: Peter Costas, of Red Bank, New Jersey, pleaded guilty to conspiracy to commit health care fraud in May 2020; Seth Logan Welsh, of Forest Hill, Maryland, and John C. Devlin, of Baltimore, Maryland, pleaded guilty to the same charge on Sept. 8, 2020.

Dickau, Welsh, Devlin, and their conspirators owned and operated a marketing company in California. They used the marketing company to help orchestrate a scheme in New Jersey, Maryland, California, and other states that involved bribing individuals addicted to heroin and other drugs to enter into drug rehabilitation centers so they could generate referral fees from those facilities. One facility in California that paid such referral fees was owned and operated by Mohammad.

The marketing company maintained contractual relationships with drug treatment facilities around the country, including the one run by Mohammad. The marketing company also engaged a nationwide network of recruiters – including Costas in New Jersey – to identify and recruit potential patients, from New Jersey and other states, who were addicted to heroin or other drugs and who had robust private health insurance.

To convince drug-addicted individuals to travel to and enroll in rehabilitation when they otherwise would not have, Costas and other recruiters offered to bribe them – often as much as several thousand dollars – with the approval of Dickau, Welsh, and Devlin.

Once the patients agreed to enroll in drug rehabilitation in exchange for the offered bribe, Dickau, Welsh, Devlin, and Costas would arrange and pay for cross-country travel to the drug treatment centers in California and other states, in concert with the owners of the facilities themselves, including Mohammad.

Costas would stay in touch with the New Jersey patients at the facilities and specifically instruct them to stay at the facilities long enough to generate referral payments, and he would pass along information to Dickau, Welsh, and Devlin about the patients’ status at the facilities.

Dickau, Welsh, and Devlin would monitor the other patients they brokered by speaking to other recruiters or to the owners and employees of the drug treatment facilities themselves.

Mohammad’s drug treatment facility had a contract with the marketing company. His facility and other facilities typically paid the marketing company a fee of $5,000 to $10,000 per patient referral.

Dickau, Welsh, Devlin, and their conspirators divvied that money among themselves. Costas and other recruiters received approximately half that amount for each patient they brokered. They brokered scores of patients to drug treatment facilities around the country, including the one run by Mohammad, and the conspiracy caused millions of dollars of losses for health insurers.

Dickau faces a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Mohammad faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing for both defendants is scheduled for Jan. 20, 2021.

Workers’ compensation premium fraud can range from misclassifying a few workers into safer jobs than what they actually perform, falsely reporting employees as independent contractors, or setting up dummy companies to “hide” employees to keep payroll, and in turn, workers’ compensation premiums artificially low.

In yet another case of alleged premium fraud, Felipe Saurez Barocio, 63, of Atwater, owner of Agriculture Services, Inc., and his daughter, Angelita Barocio-Negrete, 33, of Merced, were arraigned on multiple felony counts of insurance fraud. Prosecutors say the company allegedly underreported employee payroll by $11 million in order to fraudulently reduce the business’s premium for workers’ compensation insurance by over $2.5 million.

The California Department of Insurance said that the alleged fraud potentially left employed farm workers without insurance coverage and at financial risk.

State Compensation Insurance Fund filed a suspected fraudulent claim with the California Department of Insurance alleging potential insurance fraud last October.

SCIF reported that Barocio, as owner of a farm labor contracting business, allegedly under reported employee payroll in order to reduce the proper rate of insurance premiums owed to SCIF.

An investigation by the California Department of Insurance revealed that between 2015 and 2019, Barocio and his daughter, who worked as the office manager, provided SCIF with fabricated quarterly employee payroll reports.

The Department discovered a missing $11 million in payroll when they compared the quarterly reports submitted to SCIF to the quarterly reports submitted to the Employment Development Department.

This underreporting of employee payroll resulted in a total loss of $2,582,142 in insurance premiums.

Barocio and his daughter, Barocio-Negrete, will return to court on October 27, 2020. The Merced County District Attorney’s Office is prosecuting this case.

“When businesses illegally underreport payroll and employees they create an unfair advantage that places legitimate businesses at a competitive disadvantage,” said Insurance Commissioner Ricardo Lara.

“We all pay the price for insurance fraud through increased costs for services and higher premiums.”

Cal/OSHA has issued citations to frozen food manufacturer Overhill Farms Inc. and its temporary employment agency Jobsource North America Inc. with over $200,000 in proposed penalties to each employer for failing to protect hundreds of employees from COVID-19 at two plants in Vernon.

The employers did not take any steps to install barriers or implement procedures to have employees work at least six feet away from each other and they did not investigate any of their employees’ COVID-19 infections, including more than 20 illnesses and, in the case of Overhill Farms, one death.

According to a report in the Los Angeles times, the move followed the first fines announced for coronavirus safety violations last week. Cal/OSHA cited 11 employers in industries that included food processing, retail, agriculture, meatpacking and healthcare, and proposed penalties ranging from $2,025 to $51,190.

On April 28, Cal/OSHA opened inspections with Overhill Farms and Jobsource after receiving complaints of hazards related to COVID-19. The inspections included visits to two facilities in Vernon where Overhill Farms employees and workers from Jobsource manufacture a variety of frozen foods.

Cal/OSHA said it found hundreds of employees were exposed to serious illness from COVID-19 due to the lack of physical distancing procedures among workers including where they clock in and out of their shift, at the cart where they put on gloves and coats, in the break room, on the conveyor line and during packing operations.

At the larger of the two facilities Cal/OSHA said it identified 330 employees of Overhill Farms and 60 employees of Jobsource were exposed to the virus from the lack of physical distancing. At the smaller facility, Cal/OSHA found 80 Overhill Farms workers and 40 employees of Jobsource did packing operations, worked in the marinating area and processed raw poultry without any distancing procedures or protective barriers in place.

Other violations that put workers at risk of exposure to COVID-19 include the failure by both employers to train employees on the hazards presented by the virus and failure to investigate any of the more than 20 COVID-19 illnesses and one death Cal/OSHA uncovered amongst their employees.

The employers did not adequately communicate the COVID-19 hazards to their workforce, and Overhill did not report a COVID-19 fatality to Cal/OSHA.

The COVID-19 related violations cited at both plants include $222,075 in proposed penalties to Overhill Farms and $214,080 in proposed penalties to Jobsource, with an additional $14,450 in proposed penalties for Overhill Farms for non-COVID related violations.

Cal/OSHA also issued citations to both employers from inspections of two accidents in February, after one worker at each of the two facilities was injured when their hands got caught in unguarded conveyor parts. These accident inspections resulted in citations with $103,780 in proposed penalties to Overhill Farms, including for repeat violations due to a similar accident in 2016, and $29,700 in proposed penalties to Jobsource.

Overhill Farms said that it would contest the agency’s “erroneous” allegations, adding that Cal/OSHA has falsely claimed that the company failed to install Plexiglas dividers.

“The health and safety of our employees is our first priority,” the company said in a statement. “Overhill Farms has not only taken steps in line with the constantly evolving federal, state and local guidance, we have gone above and beyond those recommendations as we developed our employee safety procedures.”

Officials with Jobsource said they also planned to dispute the citations.

“We take the health and safety of all of our team members very seriously and we believe that we have not done anything that would endanger anyone in our community,” the company said in a statement.

According to a story in the Hollywood Reporter, pandemic-related delays on Ben Affleck’s latest film Hypnotic have sparked a lawsuit against an insurance company that’s refusing to extend the term of coverage without a COVID-19 exception even though the original policy didn’t have one.

Hoosegow Productions is suing Chubb National Insurance Company for breach of contract and fraud, among other claims, and is asking a California federal judge for a declaration that Hoosegow is entitled to have the policy’s expiration date extended “in accord with Chubb National’s custom and practice and Chubb National’s express and implied representations” and that the insurer’s assertion it has no obligation to extend the coverage and can instead offer a renewal policy containing a COVID-19 exclusion is incorrect.

The film was set to begin principal photography in April, but like countless other Hollywood productions, it was postponed because of the pandemic. Hoosegow reached out to Chubb about an extension and claims it was ignored for two months before the company said the “global Chubb position” was to deny the extension request.

The production company purchased a Film Producers Risk policy for Hypnotic and argues the insurer’s long-established policy is that if a production is delayed or disrupted the policy period is extended until the production is completed. But, when Hypnotic was delayed because of the pandemic Hoosegow says Chubb refused to extend the policy and instead offered to “renew” it with more limited coverage.

“Specifically, Chubb National said that the policy would be ‘renewed’ only with the addition of an exclusion applicable to losses relating to COVID-19, thereby depriving Hoosegow of coverage that it had purchased and that was promised under the existing policy,” states the complaint, which is posted in full below.

The policy includes $58 million of production media coverage per occurrence, $58 million of media perils coverage per occurrence and $58 million of declared person coverage per occurrence, according to the complaint. It also provides that Chubb will pay for actual production losses incurred because of the “inability of an essential element or other declared person” to complete their duties, in this case, Affleck and director Robert Rodriguez. According to Hoosegow, the policy term is Oct. 28, 2019, through Oct. 28, 2020, but the end date is merely a formality and the parties understood that coverage would be extended if filming went beyond that date.

“The Policy does not include a virus exclusion, pandemic exclusion, COVID-19 exclusion, or any other similar exclusion,” states the complaint. Hoosegow argues that it’s custom and practice to extend the expiration date “without any material change or reduction in coverage” and that it was explicitly assured of such in writing by the company’s underwriter.

Hoosegow alleges that Chubb is engaging in a “coordinated scheme to wrongfully withhold policy benefits” from its customers across the entertainment industry in an effort to save itself millions of dollars.

A Chubb spokesperson on Thursday sent The Hollywood Reporter this statement: “As a matter of policy Chubb does not comment on pending legal matters.”