By Emily Miller
A Eureka, California business owner was arrested on suspicion of felony workers’ compensation insurance fraud and grand theft, officials said Wednesday.
The California Department of Insurance and the Humboldt County District Attorney’s office investigated 57-year-old Tim Shelly, owner of Tim’s Plumbing, and uncovered multiple counts illegal business operations – such as insurance fraud and an alleged warranty scam.
During the course of the investigation, it was discovered that Shelly deliberately failed to obtain workers’ compensation insurance for his employees.
There were instances in which employees were injured and were discouraged from claiming workers’ compensation benefits. As a result, severely injured workers were unable to afford their medical bills and suffered additional financial hardships.
“Refusing to provide workers’ compensation insurance can be devastating to employees and it is illegal,” said California Insurance Commissioner Dave Jones in a press release. “California business owners should know that it is their responsibility to provide workers’ compensation insurance”
“We continue to find individuals that choose to disregard the law, but I am committed to working with our law enforcement partners to stop those who commit insurance fraud,” said Jones.
Shelley was arrested on Tuesday, June 24, 2014.
The Humboldt County District Attorney’s Office will be prosecuting the case. If convicted, Shelley faces up to 18 years in state prison and $260,000 in fines.
Further investigation revealed that Shelly was also allegedly operating a warranty replacement scam.
The scam involved removing warranty tags on water heaters installed for customer and then turning in a false warranty claim. As result, Shelley received a number of free replacements units from the manufacturer.
If you have ever or are currently experiencing a similar situation, please consult your state’s insurance department as they can further investigate the matter.
