April 7, 2025 | Los Angeles, CA — MedLegalNews.com – CA Delivery Owners: John Nemandoust and Annette Assil, a Los Angeles couple, have been sentenced after a California Department of Insurance (CDI) investigation exposed that they underreported more than $21 million in employee payroll for their delivery businesses as part of an alleged workers comp scheme. In addition to jail time, the pair has been ordered to repay $2,254,748 in restitution for unpaid workers compensation insurance premiums.
Uncovering the Scheme
The investigation focused on A-1 Valley Services, Prompt Delivery, and Affordable Messenger, the companies owned by Nemandoust and Assil, following a tip-off about the lack of workers’ compensation insurance for two of the companies. Between 2013 and 2017, the couple only secured coverage for Valley Services, while Prompt Delivery and Affordable Messenger remained uninsured. CA Delivery Owners
Fraudulent Claims and Payroll Manipulation
The couple allegedly facilitated fraudulent claims when employees from the uninsured companies experienced work-related injuries. By filing these claims under Valley Services’ policy, they misrepresented their workforce and concealed the absence of proper coverage. Over the span of four years, at least 20 employees from the uninsured companies had claims improperly filed under Valley Services.
A forensic audit revealed that the companies’ combined gross payroll exceeded $25 million, while only $1.4 million was reported to the insurance carrier—resulting in a $21 million payroll underreporting. This scheme enabled the couple to avoid paying approximately $3 million in workers’ compensation premiums.
Legal Ramifications and Restitution
As a consequence of their actions, Nemandoust was sentenced to 60 days in county jail, while Assil received 30 days. Both were also placed on 10 years of felony probation. The court ordered the pair to pay $2,254,748 in restitution for the unpaid workers’ compensation premiums.
California Insurance Commissioner Ricardo Lara commented on the case: “By misleading their insurance carriers, these business owners created an unfair advantage over their competitors and put their employees at risk. This sentence ensures they are held accountable and must repay the stolen premiums.”
Prosecutorial and Investigative Efforts
The Los Angeles County District Attorney’s Office led the prosecution, ensuring that the fraud scheme did not go unpunished. The case underscores the importance of vigilance by regulators and investigators in addressing fraudulent workers’ compensation schemes.
Key Takeaways for Employers and Legal Professionals
This case highlights the critical role that legal professionals and employers must play in ensuring compliance with workers’ compensation regulations. Fraudulent practices not only harm employees but can result in severe financial and legal consequences. Employers should ensure they are transparent with payroll reporting and insurance coverage, as violations can lead to significant liabilities.
For the full California Department of Insurance press release detailing the case, see the California Department of Insurance News Release.
For the latest legal updates and industry news on workers’ compensation fraud and insurance investigations, visit MedLegalNews.com
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FAQs: Delivery Owners Workers Comp Scheme
What is the delivery owners workers comp scheme?
The delivery owners workers comp scheme refers to a case where two Los Angeles business owners underreported millions in payroll and failed to provide proper workers’ compensation insurance for their delivery employees.
Why were the delivery owners held accountable in the workers comp scheme?
They were held accountable because they misled insurers by filing claims under a company that was insured, even though other related businesses had no coverage in place.
What penalties resulted from the delivery owners workers comp scheme?
The court ordered restitution exceeding $2 million, along with jail time and felony probation, after investigators confirmed the owners avoided paying workers’ compensation premiums.
How can employers avoid becoming involved in a workers comp scheme like this?
Employers should maintain accurate payroll records, ensure every operating entity carries valid workers’ compensation coverage, and comply with California labor and insurance laws to prevent liability.