County District Attorney Jeannine M. Pacioni announced today that Hector Hernandez,
a 38-year-old King City resident and owner of Hernandez Roofing, was sentenced
by Judge Pamela Butler to 5 years felony probation for insurance fraud and
state tax evasion. As a term of
probation, Hernandez was ordered to pay $159,059.03 in restitution to his
workers’ compensation insurance carrier, State Compensation Insurance
2013 and 2016, Hernandez secured a workers’ compensation insurance policy for
his business through the State Compensation Insurance Fund (“SCIF”). In order to pay lower insurance premiums, he
denied having any employees. The
District Attorney’s Office opened an investigation in February 2016, obtaining
building permits showing that Hernandez handled about 96 roofing jobs in a 4 year
period. Interviews of workers and
homeowners revealed that he used at least 3 employees for these jobs. Hernandez attempted to conceal the employees
and wages by paying cash. Investigators
calculated Hernandez defrauded SCIF of $159,059.00 in premiums.
District Attorney filed felony charges on January 23, 2018. The charges included intentionally
misrepresenting his payroll to SCIF to obtain a reduced premium – a violation
of Insurance Code Section 11880(a).
Hernandez was also charged with payroll tax violations of the
Unemployment Insurance Code. He pled
guilty to 3 felonies on August 23, 2019.
case was investigated by Monterey County Workers’ Compensation Fraud Unit
Investigators Martin Sanchez and George Costa.
California law, business owners and the public need to be aware that all
employers are required to secure workers’ compensation insurance for their
employees so that there is adequate medical coverage and other benefits for any
work-related injury that may occur. Additionally, employers are required to
register their business with the EDD and report their payroll on a quarterly
basis. Failing to file payroll tax
returns with intent to evade tax has a maximum penalty of three years and up to
a $20,000 fine. Persons having information about suspected workers’ compensation
fraud are encouraged to contact the District Attorney’s Office at (831)