TIPP Investigation Yields 3 Convictions

As a result of a TIPP investigation, the operator of an employee leasing company in Los Angeles has been convicted of three felonies related to the sale of fraudulent workers' compensation coverage.

Ronnie Ulloa operated an employee leasing company under the name of City Leasing. The company sold its services to clients in the garment industry, offering a discounted rate on services that included workers' compensation coverage of workers.

Acting on leads provided by garment manufacturers, TIPP began an investigation last December.

Under the Labor Code, employee leasing companies operating in the garment industry must be registered with the Labor Commissioner as garment manufacturers. City Leasing was not registered.

The investigation revealed Ulloa was operating a fraud scheme in which he sold workers' compensation coverage to clients when, in fact, no coverage existed. Ulloa pocketed the money received from clients.

Not only were garment employers victims of fraud, taxpayers could have been victims as well. In cases where no workers' compensation coverage exists, the state's Uninsured Employers Fund bears the costs associated with an injury.

Under a plea bargain, Ulloa pleaded guilty on June 7 to two felony counts of workers' compensation fraud and one felony count of grand theft. He faces two years in state prison.