SACRAMENTO, Calif. -- Two days after publicizing another conviction of a contractor committing workers' compensation insurance premium fraud, California Insurance Commissioner Dave Jones announced on October 24 that he is awarding $32 million in grants to continue fighting against such fraud.

Funded through employer assessments, the money will be distributed to 36 California county district attorney offices to support law enforcement efforts of investigating and prosecuting cases of workers' compensation fraud.

This type of funding enabled the Santa Cruz County District Attorney to prosecute Jeffrey Thranow, owner of Costa Bella Builders, who was convicted of committing workers' compensation insurance premium fraud for failing to report employees to his insurance carrier or to the Employment Development Department (EDD).

Despite holding a valid contractor's license, Thranow paid employees in cash to avoid paying workers' compensation insurance. He also dissuaded an injured employee from filing a workers' compensation claim.

Vittorio Castelli, Thranow's son-in-law, also was convicted of felony insurance fraud, and Thranow's daughter, Kathleen Castelli, was convicted of misdemeanor insurance fraud. Costa Bella Builders was ordered to pay over $47,000 in premium restitution, back taxes to EDD and pay $37,000 in restitution for the injured worker's claim.

According to Commissioner Jones, "Thranow cheated both his workers' compensation insurer and the State of California out of nearly $100,000, and by doing so passed the cost of his fraud onto consumers across the state."

The following statements were issued by various construction industry representatives:

Brad Diede, Executive Director, California Professional Association of Specialty Contractors (CALPASC)

"By looking at Thranow's company's website, this trade contractor takes great strides to appear legitimate to potential customers. But clearly from this conviction, this contractor is anything but legitimate in putting employee safety and welfare at great risk.

"There are many legitimate contractors who should get this work. We appreciate enforcement agencies that are addressing both large and small construction projects by pinpointing serial and flagrant violators to combat the underground economy."

Bobbie Everett, President, The Wood Connection, and Board Member of the National Association of the Remodeling Industry, Silicon Valley Chapter

"Our company has been called out to finish so many jobs for homeowners who were conned by fraudulent contractors. We are pleased to see enforcement branches of the state and local government take action against UNLICENSED contractors and the LICENSED contractors who are cheating, too."

Ramy Louis, Chief Executive Officer/General Manager, Tile and Grout King and Member of the National Association of the Remodeling Industry, Silicon Valley Chapter

"During the housing crisis and economic collapse in California, many contractors were scrambling to land jobs at almost any price. This bidding-war environment led many construction businesses to fail and/or cheat the system. Many contractors took cash payments from clients and used them for payroll to avoid paying workers' compensation and payroll taxes.

Contractors willing to resort to these types of tactics demonstrate the lack of integrity of some in this industry. It also is reflected in inferior work, poor customer service and inadequate or no warranties on services provided. The Commissioner's efforts to stop this from continuing are commendable."

James Stout, Owner, The Integrated Lifestyle, and Vice President, the National Association of the Remodeling Industry, Silicon Valley Chapter

"I consult for legitimate construction trade contractors who are professionals playing by the books and not deceiving the public like the impostors convicted for these violations. There are plenty of genuine construction contractors whose qualifications can be verified by local construction associations."

SOURCE California Professional Association of Specialty Contractors (CALPASC)