Contra Costa Employer Fraud Task Forces Targets Residential Home Industry for Underground Economy Violations

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Sara Abraham Annette Sanchez Julio Sanchez

MARTINEZ, Calif. – A multi-agency task force led by Contra Costa District Attorney Mark A. Peterson served search warrants on four residential care homes today and arrested and filed charges against the owners of several other residential care homes based on previous and separate search warrants. Four owners and 19 homes were involved in the investigations.

The Contra Costa County District Attorney’s Office today filed two criminal cases against the owners of those 14 care homes. The first complaint alleges the owners of Abraham Rest Home Inc. and Sanchez Abraham Corporation committed eight felony charges, including wage theft, tax, and insurance violations. Two misdemeanor labor charges are also alleged. The owners Sara Abraham, Annette Sanchez and Julio Sanchez were arrested today on warrants with bail set at $300,000.

The enforcement actions are 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.

“Businesses should not profit by stealing from their hard-working employees,” said Contra Costa District Attorney Mark Peterson. “When a corrupt business owner commits wage theft, he or she almost invariably commits tax and insurance fraud. We cannot allow these unscrupulous businesses to gain an unfair advantage over law-abiding businesses.”

Today’s search warrants, arrests, and charges involve three separate cases. Two of the investigations started after the U.S. Department of Labor received complaints about Abraham Rest Home Inc. and Sanchez Abraham Corporation and also Florin White Dove Care Homes.

The Department of Labor investigated both ownership groups and established that workers were not being paid minimum wage or overtime at 14 different care homes operated. The Department of Labor referred the matters to the Contra Costa Employer Fraud Task Force, which took over the investigation. Search warrants were served on six of the care homes on June 17 of this year, while the eight other care homes were inspected on November 26, 2013.

The second complaint also alleges wage theft, tax, and insurance violations against Florinda Yambao, the owner of Florin White Dove Care Homes, which led to the four felony charges and one misdemeanor.

The third case was the result of information discovered while investigating the other two cases. When previous search warrants were served at Florin White Dove Care Homes, information was developed about a third set of homes allegedly operated in a similar manner. That information led to today’s search warrant at Scienn Hall Care homes.

“Too often workers in residential care facilities are working long shifts, being underpaid and then are retaliated against when they exercise their rights in the workplace,” said Ruben Rosalez, regional administrator for the U.S. Department of Labor’s Wage and Hour Division.  ”We’ll continue to work with our partners in Contra Costa County to put a stop to intimidation and coercion of these employees who make a living taking care of our elderly and infirmed friends and family members.”

Labor Commissioner Julie A. Su has made combating wage theft her top priority since her appointment in 2011. A key component of this effort is the partnerships with district attorneys, as in this case, where the labor commissioner’s office began an investigation of Abraham care homes in May 2013. Together with the Contra Costa District Attorney’s office, investigations of Abraham and Sanchez-Abraham care homes uncovered $497,536.13 in unpaid minimum wages and $497,009.95 in unpaid overtime wages. Fine and penalties totaling $623.984.66 will be divided among the 48 affected employees. Joint investigations of the Florinda Yambao care homes uncovered $320,687.01 in unpaid minimum wages, $156,281.52 in unpaid overtime wages, which results in $378,199.37 in fines and penalties that will be divided among the 12 affected employees.

“These violations, totaling more than $2 million owed to 60 residential care workers, reveal a deliberate indifference to laws of California and to the basic wage floor to which every employee in California is entitled,” said Labor Commissioner Su. “These employees worked 12 to 16 hours a day and were compensated with daily rates ranging from $50-$80. Wage theft is a crime that harms working people, undermines the safety and care of patients in residential care homes, and threatens our economy. It will be met not only with civil citations but criminal prosecution. We are grateful to the Contra Costa district attorney for their collaboration with us to bring these employers to justice.”

“We take payroll tax evasion very seriously and work with our partners to prosecute all underground employers to the fullest extent of the law,” said EDD Director Patrick W. Henning, Jr. “By breaking the law, these employers not only cheat the market, they’re also not contributing to California’s unemployment and disability insurance programs which provide critical benefits to hard-working employees at a time of great need.”

It’s estimated that employers operating in the underground economy evade billions in state taxes annually. Failing to file payroll tax returns with the intent to evade tax is a felony and has a maximum penalty of three years in custody and up to a $20,000 fine.

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 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.


4 COMMENTS

  1. As far as I know, California wage law states, over eight hours of work should be paid overtime pay. Most of these employees work more than eight hours a day. And most of them are not documented or are not legal to work or live in the United States.
    These greedy owners of care homes makes at least $2k per patient and they clearly take advantage of their employees while they live in nice homes. They also committed tax fraud and IRS should also investigate them as well.

  2. My grandparents live in one of their homes and now my family doesn’t know what they are going to do. They were paying $4k EACH. This is awful. There were no resources left to the residents and the houses that were not raided didn’t even know this was going on until the article in the CC Times came out. The Dept. of Social Services was nowhere to be found to help anyone out. We are basically waiting for an eviction notice because no one is talking to the residents.

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