This story was updated at 4:50 p.m. Aug. 31, 2012, to clarify a point regarding the source of funding.
Funds for investigating and prosecuting insurance fraud cases in Temecula and Murrieta will most likely get reimbursed through a county-wide, $2.4 million grant, it was announced Thursday.
The state insurance commissioner awards the grants based upon the determination of funding by the Fraud Assessment Commission.
Riverside County regularly seeks grants from the state to combat crime and this award is the latest, officials said.
Owners of a Temecula-based company were prosecuted with funds from a state grant, according to Riverside County District Attorney spokesperson John Hall.
The company was called Citywide Roofing, owned by Dale and Caryn Kizziar.
The couple committed fraud on multiple levels, according to the District Attorney's office.
The most significant type of fraud committed is called "x-mod" fraud, according to Hall.
Dale Kizziar and his wife fraudulently enhanced their employees' experience level on paper in order to pay them commensurate salaries, Hall said.
The couple also allegedly paid employees in cash -- without taking taxes out -- and failed to pay workers' compensation insurance and unemployment insurance to the state, Hall said.
The total loss caused by the Kizziars’ fraud was $768,996, Hall said.
In February of 2011, the defendants were convicted of two counts each of willful misrepresentation; They additionally admitted to committing multiple felonies, taking more than $500,000.
One count of failing to collect and pay taxes was dismissed as part of a settlement agreement.
They were sentenced to six months in jail and three years probation, Hall said.
County and state officials decry economic conditions as factors in a surfeit of unemployed workers not having taxes taken out of their cash salaries, officials said.
"That, unfortunately, has significantly contributed to increased workers’
compensation and automobile insurance fraud throughout the Inland Empire,” said DA Paul Zellerbach.
“It is through these types of collaborative efforts with the California Department of Insurance that continue to allow this office to actively investigate and prosecute these types of crimes which have a significant negative
impact on our local economy.
For the fiscal year 2013, Riverside County was awarded the following grants from the Fraud Assessment Commission:
- $1,488,786 to combat workers’ compensation insurance fraud;
- $650,000 to combat regular automobile insurance fraud and;
- $336,247 to combat organized, or urban, automobile insurance fraud.
The grant money will cover the salaries and benefits of five prosecutors, seven investigators, one paralegal and one investigative technician assigned to the insurance fraud units within the DA’s Special Prosecutions Section, Hall said.
California Insurance Commissioner Dave Jones said, “I am pleased today to announce $2.4 million in grants to the Riverside District Attorney to fight workers’ compensation and auto insurance fraud."
Workers’ compensation insurance fraud drives up the cost of workers’ compensation insurance and hurts honest business and our economy; Auto insurance fraud drives up the price of auto insurance for consumers.”
In another case, Keith Dwayne Trull in 2009 reported to Murrieta police that his motorcycle had been stolen from a fast-food joint's parking lot, Hall said.
He collected from his insurance carrier, GEICO, but an anonymous tip led to an investigation.
The case was referred to the state Department of Insurance for investigation, where agents learned from witnesses that the defendant frequently complained about money worries.
Investigators were told by witnesses that Trull said he either needed to make more money or get rid of some of his "toys," Hall said.
"One witness stated that, on several occasions, Trull said that it was not difficult to 'get rid' of a motorcycle and that any number of things could be done to the motorcycle so that he could collect on the insurance money," Hall wrote.
A jury in March convicted Trull of two counts of making fraudulent claims; he was sentenced to 210 days in county jail and four years probation, according to court records.