Think back to all the lessons you learned when you had your own lemonade stand, and apply them to the following business model.  Step 1) defraud the State of California to the tune of $30 million; Step 2) get caught; Step 3) pay back a few million, give up $500,000 in jewels, plea to 10 years of probation; Step 4) Profit!

This is the approach taken by Devon Lynn Kile, who recently was convicted of running one of the larger California workers’ compensation fraud schemes, at least according to a few news sources, including ClaimsJournal and OCWeekly.

Kile, who, coincidentally, had previously applied to be one of the “Real Housewives of Orange County“, was convicted of 72 felony counts of variations of fraud, including the under-reporting of income and payroll.  As part of her plea deal, she will pay back $1.3 million to Employment Development Department, $1.5 million to the Franchise Tax Board, and some amount not yet determined to State Compensation Insurance Fund.

Kile was sentenced to ten years in prison, suspended for 10 years of probation.  If she is a model citizen, living off whatever remains of her ill-gotten goods, she will escape justice.

All-in-all, a profitable venture – your disappointed blogger applauds the Orange County District Attorney’s office for its investigation and prosecution of this case, but would have liked to see all the money returned before serving actual prison time was taken off the table.

Some time ago I blogged about Sim Hoffman & Company, accused of committing vast amounts of fraud by billing for services never rendered to applicants and other schemes.

It appears that although Justice is coming, it is riding the California High Speed rail and thus taking its sweet time.

The case has been continued again, this time delaying the arraignment until January 6, 2012, according to adjuster.com

There are plenty of defendants out there who still have active liens from Advanced Professional Imaging and Better Sleeping Medical Center who need some sort of decision from the criminal fraud aspect of this case before they can decided whether they should pay or not.

In any case, dear readers, hopefully when Justice does deal with this case, it will be to the benefit of the workers’ compensation defense community.

As always, when I know more, so will you.

Recently, the Contractors State License Board’s Statewide Investigative Fraud Team performed a two-day sting operation, in which agents posed as homeowners and solicited bids. According to the CSLB’s press release, the result was over 100 people caught violating the law in various ways, including not carrying workers’ compensation insurance for their employees.

On the surface, this might appear relatively harmless, but it isn’t. Even though the injured employee could go after his uninsured employer, there lies an additional danger to the home-owner. Part of the requirement of being a licensed contractor in the state is having workers’ compensation insurance for your employees. When the contractor is underinsured or has obtained workers’ compensation insurance through fraud, he stops being a licensed contractor.

So the nice gentleman you hired to put his crew to work fixing your house is, suddenly and without your knowledge, your employee. And his employees have become your employees too. Now, in the unfortunate event of one of the workers sustaining an injury on the job, YOU are the uninsured, on-the-hook employer.

In other words, this isn’t some government annoyance like the shaking down of an “unlicensed” lemonade stand. This type of insurance fraud carries very serious and direct consequences for ordinary consumers, one which can not be spread around as a cost of doing business.