San Jose Man Arrested for Workers’ Comp Insurance Fraud

A San Jose, Calif., man has been arrested in connection with suspected workers’ compensation fraud, the state Department of Insurance reported. Daniel Ethan Nelson, 48, was arrested at the Oakland Airport by Alameda County Sheriff’s Deputies on April 14 and charged with one felony count of workers’ compensation premium insurance fraud. Bail was set at $50,000. If convicted, Nelson could face up to five years in prison and/or $50,000 in fines.

An investigation conducted by CDI and the Santa Clara County District Attorney’s Office revealed Nelson’s alleged fraud. Worldwide Attractions and Monster Magic LLC are entertainment companies specializing in Halloween related attractions. It is alleged that Worldwide Attractions and Monster Magic LLC, under their parent company Blue Wave Holdings, committed workers’ compensation insurance premium fraud by not reporting employees on payroll reports to their workers’ compensation insurer, SCIF. It is also alleged that SCIF insured several Blue Wave Holding’s subsidiary companies that failed to disclose other entities and operations they were involved in as required on the initial applications. Daniel Ethan Nelson is alleged to be the principle individual in charge of Blue Wave Holdings and its subsidiary companies.

CDI’s initial investigation revealed that between January 2006 and December 2006, Worldwide Attractions/Monster Magic LLC purportedly intentionally underreported payroll to SCIF by as much as $77,164.11. The underreported payroll resulted in a premium loss to the company’s insurer, SCIF, of approximately $11,255.55.

Evidence seized from Worldwide Attractions/Monster Magic LLC/Blue Wave Holdings bank accounts, revealed an additional $507,178.16 in payroll that was found to have been unreported to SCIF. The discovery of the additional unreported payroll increased the premium loss to SCIF to approximately $57,327.68.

The Santa Clara District Attorney’s Office is prosecuting this case.

Source: CDI