California Business Owner Arrested for Insurance Fraud

Teresa Reif, 31, was arrested on multiple counts of suspected workers’ compensation insurance premium fraud, including under-reporting $10,567,776.69 in payroll, according to California Insurance Commissioner Dave Jones. In addition, she reportedly avoided paying a total of $2,957,089.20 in insurance premium. If convicted, she could face up to five years in prison and/or a $50,000.00 fine.

Reif is the owner of Genesis Building Services, Inc., a janitorial & pest control company in the Bay Area. Between 2005 and 2009, Genesis purchased workers’ compensation insurance through Redwood Fire & Casualty Insurance Company (Redwood) and the State Compensation Insurance Fund (SCIF). In 2008, Redwood suspected Genesis of under-reporting its payroll. Based on this suspicion, Redwood referred the suspected fraudulent activity to the California Department of Insurance (CDI).

The CDI Fraud Division conducted an investigation and determined that Reif had misrepresented both the number of employees working at the company and its payroll when they applied for their workers’ compensation insurance, while they were insured, and during the annual audits that were conducted by the insurance carriers. Genesis allegedly employed in excess of 140 employees, yet reported less than half of the employees’ payroll to its insurance carriers. Reif allegedly provided auditors with fraudulent paperwork in order to support the fraudulent monthly reports.

Source: California Department of Insurance, Fraud Division