In separate cases from Santa Clara County, a child therapist and a father-son duo running a commercial cleaning business have been found guilty of significant workers’ compensation insurance fraud.
Mark Anthony Ramos, 50, of Escondido, the owner of Stars Bay Area Therapy Group, faces sentencing in August. He has been sentenced to three years in prison, with six months in county jail pending full restitution payment.
Meanwhile, Edgardo Cabrales Sr., 62, and Edgar Cabrales Jr., 37, will receive probation for ten years this week due to their involvement in a $4 million fraud scheme linked to their cleaning enterprises. Both have already completed an 18-month alternative jail program and paid over $1 million in restitution.
Santa Clara County District Attorney Jeff Rosen highlighted the serious consequences of failing to uphold mandatory workers’ compensation insurance, which is designed to protect employees from work-related injuries.
“Neglecting to provide this protection leads to severe repercussions,” DA Rosen stated. “Those who evade paying rightful premiums are cheating not only insurance companies and their workers but also honest businesses.”
Ramos admitted guilt to insurance fraud earlier this year. His business provided therapeutic services to children aged birth to three in areas including Santa Clara County, Hollister, and Southern California. From 2015 to mid-2022, he systematically underreported employee payroll to defraud his workers’ compensation insurers. Employing multiple corporate names and falsely asserting that employees conducted only telehealth services, he drastically understated the actual payroll. An investigation was triggered when an employee mistakenly submitted an accurate payroll figure of approximately $3 million, starkly contrasting with the $132,000 reported by Ramos. When questioned, he reacted in disbelief, stating, “How’d the hell did you get that bill?” The fraudulent activities resulted in losses exceeding $288,000 for the insurers.
The Cabrales family operates two commercial cleaning firms in San Jose, Pine Building Maintenance and Network Facility Management. A 2019 inquiry by the California Department of Insurance was initiated after suspicions arose regarding fraud linked to these companies. Investigators found that since 2016, the Cabraleses had only insured a portion of their employees at Pine Building Maintenance and had never secured workers’ compensation insurance for those at Network Facility Management, despite the majority of their operations being conducted through the latter. Their actions led to an estimated $4.2 million in unpaid insurance premiums.
