Home Contra Costa County DA: Residential Care Home Owner Convicted for Several Underground Economy Violations

DA: Residential Care Home Owner Convicted for Several Underground Economy Violations

by ECT

MARTINEZ, Calif. – Contra Costa District Attorney Mark A. Peterson and California Labor Commissioner Julie A. Su announced today that residential care home owner Florinda Yambao was convicted of several counts related to California’s underground economy. Ms. Yambao pled guilty to one felony count of violating Penal Code 487(a) grand theft – alleging theft of wages from her employees. She also pled guilty to a felony count of the California Unemployment Insurance Code alleging she failed to file tax returns. A third charge alleged a misdemeanor violation related to Workers Compensation Insurance.

Ms. Yambao was placed on felony probation for 3 years, ordered to serve 60 days in county jail and required to pay restitution for her crimes. The restitution amount for the wage theft was determined to be $453,000. As part of the plea agreement, $71,800 dollars seized during the execution of a search warrant last June was disbursed directly to the victim workers. Restitution for the tax charges will be determined after audits are completed.

This conviction is the result of a yearlong investigation by members of the Contra Costa Employer Fraud Task Force, including investigators from the California Department of Insurance, the Department of Industrial Relations, the Employment Development Department, and the U.S. Department of Labor. The task force is currently investigating 9 other care home owners who operate a total of 40 facilities in Contra Costa County.

The criminal investigations and prosecutions by these agencies have discovered a pattern of underground economy violations at these institutions. The businesses increase their profits when they fail to pay taxes, fail to pay for insurance, and largely fail to pay their employees. This creates an unfair business advantage over law-abiding businesses.

The investigations have also exposed the rampant and unfair treatment of workers in this industry. Workers commonly work long hours for less than minimum wage, live in substandard conditions, and are forced to care for patients during their time off.

“Ms. Yambao, as the owner and boss of these care facilities, was in a position of power over her employees. She used that position to exploit the workers and line her own pockets with the cash. It was pure greed,” said District Attorney Mark Peterson.

Labor Commissioner Julie A. Su has made combating wage theft her top priority since her appointment in 2011. “Wage theft is a crime.  We are proud of our partnership with the Contra Costa D.A. to investigate and prosecute it so that we get earned wages into workers’ pockets,” said California Labor Commissioner Julie A. Su.  “In addition to getting workers paid, my office will continue to pursue civil penalties so employers who break the law know that crime doesn’t pay.”  The Labor Commissioner’s office has already begun to make payments to the workers.

Media Notes:

This case was handled in Contra Costa County by Deputy District Attorney William Murphy, Sergeant Derrick Lane for the California Department Insurance, Senior Deputy Labor Commissioner Donna Chen for the Department of Industrial Relations, Supervising Criminal Investigator Althea Dong for the Employment Development Department, and Assistant District Director Alberto Raymond of the United States Department of Labor.

The mission of the Contra Costa Employer Fraud Task Force is to combat labor, tax, and insurance code violations. Members of the Department of Industrial Relations’ Labor Commissioner’s office investigate allegations of wage theft and unpaid overtime. Agents of the Employment Development Department gather evidence of tax violations, and agents from the Department of Insurance investigate workers’ compensation insurance violations. All of these agencies work with the Contra Costa County District Attorney’s office to investigate and prosecute employers who commit fraud and economic crimes. The task force targets different industries on a rotating basis.

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