FBI Seeks Victims of Alleged Nationwide Workers’ Compensation Fraud

The FBI is seeking to identify businesses that may be victims of an alleged nationwide workers’ compensation insurance, health care insurance, and pension plan fraud scheme.

The FBI is urging businesses that purchased policies from Clovis, Calif.-based American Labor Alliance or one of its many subsidiaries nationwide to contact their state insurance regulator to ensure the validity of their policies.

ALA was fined by former Insurance Commissioner Dave Jones in late 2018 for selling workers’ comp and liability policies to employers of farmworkers without being properly licensed with the California Department of Insurance.

On Jan. 10, ALA and two of its executives were charged with mail fraud, conspiracy to commit mail fraud, and money laundering by a 14-count federal grand jury indictment. Court documents allege ALA and its subsidiaries sold what was purported to be workers’ comp coverage that, in actuality, may offer no coverage.

From at least 2011 onward, ALA offered what it purported to be a retirement pension plan to its clients, known by a variety of names including “ALA Trust,” the “ALA Retirement Plan Trust,” or the “ALA Retirement Plan and Trust,” that may also be invalid. According to court documents, ALA and its affiliates allegedly purported to offer a broad range of financial services to potential clients, including tax preparation and drafting of incorporation and other documents. It fraudulently marketed itself as a special type of labor organization under federal law and advertised that its customers could join ALA and receive financial services.

This case is the product of an investigation by the FBI, United States Department of Labor, Employee Benefits Security Administration, San Francisco Regional Office, and California Department of Insurance.

Businesses that believe they may have been a victim of this alleged fraud are urged to call 1-800-CALL-FBI or send an email to WCVictims@fbi.gov.

Related:

• California Hits 2 Companies with $4.3M Fine for Improperly Selling Workers’ Comp
• California Companies Ordered to Stop Selling Workers’ Comp Policies
• California Company Says CDI Wrongly Halting Sales of Workers’ Comp Product