Employment fraud probe in Sutter, Yuba counties yields more indictments
06/20/2014 5:41 PM
06/20/2014 11:27 PM
Portraying a professional thief in the 1995 movie “Heat,” Robert DeNiro chats over coffee with an obsessive Los Angeles police detective played by Al Pacino.
“I do what I do best. I take scores. You do what you do best. Trying to stop guys like me,” DeNiro’s character says.
“I don’t know how to do anything else,” Pacino replies.
“Neither do I,” says DeNiro.
DeNiro’s character is an armed robber; otherwise the scene could be part of a movie on the history of disability and unemployment claims fraud in Sutter and Yuba counties.
The racket, which authorities say has resulted in the loss of more than $14 million to the California Employment Development Department, generated federal indictments of more than 20 people in 2012 and 2013.
Yet, according to Sacramento FBI chief Monica Miller, the suspects just kept right on doing what they were doing. So federal authorities kept doing what they do.
U.S. Attorney Benjamin Wagner and others announced this week that the investigation has resulted in a new grand jury indictment charging four people with participating in the fraud, plus an amended indictment bringing additional counts against people who had previously been charged.
The rip-off, Wagner said, involves farm-labor contractors selling false pay stubs that show the buyers had been employed by the contractors, when they had not. The stubs enabled the buyers to apply for unemployment and disability benefits to which they were not entitled.
“Any fraud against the employer-funded unemployment insurance program or the employee-funded disability insurance program is unacceptable,” said Patrick Henning Jr., director of EDD. “The EDD is committed to protecting these vital programs.”
The buyers are alleged to have paid approximately $250 for every $1,000 in wages reflected on the stubs. The businesses involved were reported to the EDD as having provided contract agricultural labor during various periods beginning in 1989.
Over the course of the conspiracy, Wagner said, false wages were reported for more than 1,000 individuals, resulting in more than 2,000 bogus claims for unemployment and disability benefits.
The latest round of charges brings to 28 the total number of defendants; 13 have pleaded guilty.
A federal grand jury returned an amended indictment Wednesday that expands the charges in the original 2012 indictment against six defendants.
In the new indictment, one of those defendants and another man are charged with cranking up a new scheme to sell wages for nonexistent work. That indictment also includes two new individuals charged with committing perjury before the grand jury.
The amended indictment names as defendants Mohammad Nawaz Khan, 56; Mohammad Adnan Khan, 31; Iqila Begum Khan, 31, all of Live Oak, and Mohammad Shahbaz Khan, 56, of Yuba City. It says they controlled a series of companies that were ostensibly farm-labor contractors. The Khans, along with Gurdev Kaur Johl, 69, and Kewal Singh, 76, both of Yuba City, are accused of selling phony pay stubs and using their companies to report false wages paid to the buyers.
The new indictment alleges that, while out on bond in connection with the earlier charges, Mohammad Shahbaz Khan began a new conspiracy with Mohammad Riaz Khan, also known as Ray Khan, 53, of Live Oak, to carry on the identical fraud.
Authorities say Mohammad Riaz Khan issued checks to his fake employees and directed them to cash the checks and return the money to him in order to make it appear they were actually paid. That same indictment accuses Harmit Chechi, 27, and Harjit Johal, 47, both of Yuba City, of lying to a grand jury run by federal prosecutors to investigate the fraud.
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