Employment tax violations are often accompanied by a host of other charges. Nathan and Sarah Moore of NRM Renovations, Inc. (NRM) got a taste of this when 11 felony charges were filed against them, including payroll tax fraud, workers’ compensation fraud, grand theft of labor, and other related labor code and insurance law violations charges.
The Trigger
Nathan and Sarah Moore’s construction company was initially investigated in June 2015 by the U.S. Department of Labor and the state Department of Industrial Relations following numerous complaints for NRM’s failure to pay its workers adequate wages for doing hotel renovations. The complaints were forwarded to the District Attorney’s office, which initiated a thorough investigation of suspected labor violations with the California Department of Industrial Relations, California Department of Insurance, and Employment and Development Department.
Multiple Charges
In addition to owing more than $30,000 in back wages to employees, the Moores were found to have also underpaid workers’ compensation insurance premiums (to the tune of around $250,000) and owed payroll taxes on one million dollars’ worth of wages. Charges were brought against them for:
- Grand Theft of Labor, under Penal Code 487 (for taking, without compensation, the labor or property of another valued at more than $950)
- Workers’ Compensation Fraud, under Insurance Code 11760(a) and Insurance Code 11880(a) (for making fraudulent statements material to the determination of workers’ compensation insurance premiums)
- Unemployment Insurance (UI) Code Violations, under 2108 (for willful failure to pay unemployment and disability insurance contributions), 2177.5 (for willful failure to file a return) and 2118.5 (for willful failure to account for and pay over taxes)
The Moores were also charged with an Aggravated White Collar Crime Enhancement under Penal Code 186.11(a)(3) (for engaging in a pattern of felony conduct which results in the loss by another person or entity of more than $100,000).
The Authorities Have No Tolerance for Wage Theft
NRM apparently had a good reputation before the employee complaints were made. It was recognized by more than one organization for its excellent construction management and its clientele included the Hilton, Marriott and Wyndam hotel groups. The company had no history of citations or disciplinary actions since it received its contracting license in 2012. However, once the wage complaints were made and the multi-agency investigation commenced, the charges were swift and harsh.
Financial Crimes Defense
The attorneys at Moskowitz, LLP provide top quality criminal and civil representation before the Department of Justice, State of California, and regulatory agencies. In addition to providing aggressive defense services, our extensive experience enables us to advise our clients on how to prevent white collar financial crimes from developing in the first place. Call us today for a consultation.