The owner of a Northern California construction company and his family members in were convicted of committing workers’ compensation insurance premium fraud.
Jeffrey Thranow, 59, owner of Costa Bella Builders was convicted of committing workers’ compensation insurance premium fraud for his part in failing to report employees to his insurance carrier or to the Employment Development Department.
Thranow’s son-in-law, Vittorio Castelli, 34, was also convicted of felony insurance fraud, while Thranow’s daughter, Kathleen Castelli, 34, was convicted of misdemeanor insurance fraud.
“Thranow cheated both his workers’ compensation insurer and the State of California out of nearly $100,000, and by doing so passed the cost of his fraud onto consumers across the state,” California Insurance Commissioner Dave Jones said in a statement.
Thranow and his family members were brought to justice by a collaborative effort between the California Department of Insurance and the Santa Cruz District Attorney’s Office.
The joint investigation began in November 2011 into Costa Bella Builder in response to an employee injury. Thranow, a licensed contractor operating in Aptos, paid employees in cash in an attempt to avoid paying workers’ comp insurance, according to investigators.
The investigation uncovered evidence that Thranow along with his daughter and son-in-law colluded to convince employees to accept these cash payroll payments. A Costa Bella employee was injured during this time and required surgery. Thranow dissuaded this employee from filing a workers’ comp claim and instead offered him a State Disability Form with instructions to claim the injury occurred while the employee was home.
Costa Bella Builders was ordered to pay over $47,000 in premium restitution, nearly $30,000 in back taxes to EDD, and pay $37,000 in restitution related to the injured workers claim.
Thranow was sentenced to one year of jail, Vittorio Castelli was sentenced to six months of jail and Kathleen Castelli was sentenced to one year of probation.