Farm Labor Contractors of King City Receive Suspended Prison Sentences for Workers’ Compensation Fraud

 

SALINAS, California - Monterey County District Attorney Jeannine Pacioni announced on November 3 that the Honorable

Judge Rafael Vasquez sentenced farm labor contractors 43-year-old Elias Perez, Jr. and

40-year-old Alejandra Perez both of King City to 3-years in prison for insurance fraud committed between 2013 and 2017. Judge

Vasquez also suspended those prison sentences, placing each Defendant on 7-years felony probation subject to a

variety of conditions.

The Defendants, who are brother and sister, are corporate officers for Future Ag. Management, Inc. and Future

Harvester & Packers, Inc. Since 2013, those companies have operated as farm labor contractors under California

and federal licensing laws. The 2 companies have employed as many as 1500 farm workers at any one time. As

employers, the Defendants are required to maintain workers’ compensation insurance to ensure injured workers

have access to medical care, disability and other benefits. Between 2014 and 2016, the Defendants’ businesses

were the subject of federal and state investigations involving wage and hour violations. Those investigations

concluded with the payment of fines and compliance agreements.

The criminal case originated in July 2016 when an injured worker complained that her supervisor refused to take

her to a doctor and forced her to be treated by an unlicensed health care worker. The California Department of

Insurance began investigating the Defendants’ workers compensation insurance policies as well as their bank

records. Forensic auditors determined that the Defendants provided their insurance companies with false payroll

reports to conceal their actual payroll and obtain a reduced premium. Through search warrants, investigators

obtained and analyzed the Defendants’ bank accounts and found that the Defendants had underreported their

payroll for 2013 and 2017 by $17,397,790 million. By doing so, the Defendants paid far less premium than what

was owed. Under California criminal law, making a material misrepresentation to obtain a lower workers’

compensation insurance premium has a maximum penalty of five years and a fine of up to double the amount of

the fraud. In addition, investigators uncovered evidence that Defendant Elias Perez, Jr. instructed one of the

company’s supervisors to deny at least 3 injured workers with access to workers’ compensation benefits.

On November 10, 2020, the Monterey County District Attorney filed felony fraud charges against the Defendants.

Even after the case was filed, investigators continued to uncover evidence of felonies committed by the

Defendants. Specifically, the investigators determined that the Defendants had submitted falsified paychecks to

the United States Department of Labor during that agency’s 2015 investigation into wage and hour violations. It

is a felony to file a falsified document with a public agency. As a result of this discovery, the District Attorney

added additional felony charges on July 18, 2022.

On June 29, 2023, both Defendants pled guilty to 2 felony counts of insurance fraud. At the sentencing, Judge

Vasquez imposed 3-year prison sentences on each Defendant. Judge Vasquez then suspended execution of those

prison terms and placed the Defendants on 7-years of felony probation. As part of probation, they will serve 210

days in county jail and pay restitution in the amount of $633,785.61. Additionally, Judge Vasquez has the

authority to revoke the farm labor contractor licenses for the Defendants and their corporations if the Defendants

violate probation in a manner which affects the health, safety or workplace conditions of their employees.

In announcing the sentence, Monterey County District Attorney Jeannine Pacioni stated: “My office is committed

to prosecuting businesses and individuals who engage in predatory and fraudulent practices, particularly where

such practices deny employees with access to mandated benefits. We are working in collaboration with the

California Department of Insurance and the Labor Commissioner to ensure that these businesses are identified and

prosecuted to the full extent of the law.”

The California Insurance Commissioner Ricardo Lara stated: “Every employee deserves to go to work feeling

safe and confident that they will be protected if an accident occurs. These employers chose to sacrifice the safety

of their workers to illegally increase their own profits. This conviction serves as a reminder to all employers that

they must follow the law and they must make their employees a priority. Thanks to the hard work of our

detectives and the Monterey County District Attorney’s Office these dishonest business owners have been

stopped.”

The California Labor Commissioner Lilia Garcia-Brower stated that: “This case represents effective government

collaboration. Together we defined a path to recover restitution, bring business operations into compliance, and

provide a mechanism for 1,500 workers to continue employment. I applaud my team, California Department of

Insurance and the Monterey District Attorney for maximizing the impact of this enforcement action.”

Persons having information about suspected workers’ compensation fraud are encouraged to contact the District

Attorney’s Office at 831-755-3224.