The owner of a National City janitorial service pleaded guilty Feb. 26 to insurance fraud in which he reported he had fewer employees than he did so his insurance premium payments would be lower.
Deputy District Attorney David Bagheri said Marco Castaneda, 46, has agreed to pay $100,000 to his insurance company, which represents the amount that was defrauded in his misrepresentation for Quality Way Building Maintenance.
Sentencing was set for July 9 by San Diego Superior Court Judge Timothy Walsh. Castaneda, who lives in El Cajon, remains free on his own recognizance. The sentence was set less than five months off so he can begin making payments.
Bagheri said it is a common illegal practice for some businesses to pay employees “under the table” so they would pay less tax, and less withholding. Worker’s compensation insurance is based on number of employees, so reporting fewer workers means lower insurance premiums.
Although the maximum sentence is five years in prison, it is more likely he will receive probation, according to court records. The prosecutor wrote he would seek up to a year in jail or less. Walsh wrote he would consider “alternatives to custody” in jail.
The plea form contained this promise: “After full payment of restitution, DA agrees to reduction to misdemeanor.”
Bagheri said both parties agreed upon the $100,000 restitution figure. Three similar charges were dismissed after the guilty plea.
Castaneda’s firm was one of four companies whose owners were indicted by a county grand jury and announced by District Attorney Bonnie Dumanis in a press conference on Jan. 28. Two others were in Escondido and a third one was in Encinitas.
Castaneda was indicted by a county grand jury on Dec. 19, 2013, and had been awaiting an April trial.
One remodeling business in Encinitas involved a situation in which a worker was injured from a fall, but his boss told him to say he was injured at home because he didn’t have workers’ compensation insurance.
Ten employees of another business were indicted for receiving unemployment benefits at the same time they were getting paid cash under the table by their employer.
