California Court of Appeals, Fourth District, First Division
from a judgment of the Superior Court of San Diego County,
No. SCD238770 Runston G. Maino, Judge. Affirmed.
G. Coleman, under appointment by the Court of Appeal, for
Defendant and Appellant.
D. Harris, Attorney General, Gerald A. Engler, Chief
Assistant Attorney General, Julie L. Garland, Assistant
Attorney General, Eric A. Swenson, Lynne G. McGinnis and
Jennifer B. Truong, Deputy Attorneys General, for Plaintiff
Acting P. J.
case, defendant and appellant John Paul Riddles pled guilty
to one count of workers' compensation insurance fraud in
violation of Insurance Code section 11760,
subdivision (a). His conviction grew out of his application
for workers' compensation insurance, which fraudulently
represented that a number of nurses who had been placed in
residential care and skilled-nursing facilities by
Riddles's staffing agency were computer programmers. His
misrepresentation of the nurses as computer programmers
substantially reduced the premium his agency was charged by
the workers' compensation insurer that accepted his
company's application; accordingly, the trial court
required that Riddles pay, as restitution to the insurer,
$37, 000 in premiums the insurer would have earned in the
absence of his misrepresentation.
to his argument on appeal, a workers' compensation
insurer may recover, as restitution under Penal
Code section 1202.4, the premiums it would
have earned in the absence of misrepresentations by an
insurance applicant. (See People v. Petronella
(2013) 218 Cal.App.4th 945, 968-984 (Petronella).)
The fact Riddles may have been able to establish that the
Labor Code did not require that he provide workers'
compensation coverage for the nurses does not relieve him of
responsibility for providing the insurer with a fraudulent
application or alter the fact the nurses were covered by the
policy he obtained.
reject his contention that the trial court erred in imposing
an $860 fine.
AND PROCEDURAL BACKGROUND
least 2005 until 2009, Riddles operated Confident Care, a
staffing agency that placed nurses at residential care and
skilled-nursing facilities. One facility expressly required
that Confident Care provide workers' compensation
insurance for the nurses; the record also shows that
Confident Care provided certificates of workers'
compensation insurance to other facilities where it placed
rates for workers' compensation insurance are based on
the number of workers employed in various classifications and
the amount paid to workers in each classification. Premium
rates for computer programmers are as low as 26 cents per
$100 of payroll. Premium rates for higher classification
workers can be up to $50 per $100 of payroll. Riddles
classified the nurses he placed in health care facilities as
computer programmers and underreported their payroll.
the People's initial complaint, which was filed in
January 2012, alleged Riddles had fraudulently obtained
workers' compensation for nurses commencing in 2005,
Riddles's plea and conviction is based on a workers'
compensation insurance policy he obtained for Confident Care
from First Comp Insurance (FCI) for the period between
January 21, 2007 and January 21, 2008. As a result of
Riddles's fraudulent misclassification, Confident Care
paid FCI a premium of $554 for the year ending in January
2008; however, an audit of three facilities that contracted
with Confident Care during that period showed the agency
should have paid FCI a premium of $39, 604. Thus, an
insurance investigator calculated that FCI lost the audited
premium for the year ($39, 604) minus the premium Confident
Care paid ($554) or approximately $39, 000.
following a restitution hearing, the court ordered Riddles to
pay FCI $52, 259 in restitution. However, Riddles moved to
reconsider and the court amended its order and set
restitution at $37, 000. Riddles filed a timely notice of