Felipe Saurez Barocio, 63, of Atwater, owner of Agriculture Services Inc., and his daughter, Angelita Barocio-Negrete, 33, of Merced, were arraigned today on multiple felony counts of insurance fraud after allegedly underreporting employee payroll by $11 million in order to fraudulently reduce the business’s premium for workers’ compensation insurance by over $2.5 million.
The alleged fraud potentially left employed farm workers without insurance coverage and at financial risk, according to the California Department of Insurance.
On Oct. 14, 2019, State Compensation Insurance Fund reportedly filed a suspected fraudulent claim with the CDI alleging potential insurance fraud. SCIF reported that Barocio, as owner of a farm labor contracting business, allegedly underreported employee payroll in order to reduce the proper rate of insurance premiums owed to SCIF.
An investigation by the department reportedly revealed that between 2015 and 2019, Barocio and his daughter, who worked as the office manager, provided SCIF with fabricated quarterly employee payroll reports. The department discovered a missing $11 million in payroll when they compared the quarterly reports submitted to SCIF to the quarterly reports submitted to the Employment Development Department.
This underreporting of employee payroll resulted in a total loss of $2.5 million in insurance premiums, according to the CDI.
Barocio and his daughter, Barocio-Negrete, will return to court on Oct. 27. The Merced County District Attorney’s Office is prosecuting this case.
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