Fraud News: Workers’ Comp Misclassification, Sandy Engineer Sentenced
A Riverside woman was arraigned Wednesday, March 29, 2017, on 52 felonies
related to workers’ compensation insurance fraud that resulted in a loss of more than $540,000 to two insurance companies.
Joanne Trealoff, DOB: 2-10-56, is charged with providing a false statement to reduce workers’ compensation rates (Insurance Code section 11760 (A )) and failure to disclose facts regarding insurance benefits (Penal Code section 550 (B)(3)). Trealoff is the owner of Eclipse Recreational Vehicles Inc, a manufacturer of toy haulers and travel trailers located in the city of Riverside.
Trealoff appeared in Riverside Superior Court on March 29, 2017, and entered not guilty pleas to all 52 counts. A felony settlement conference is scheduled for June 7, 2017.
Two other people have been charged in this case but, as of this news release, had not been
arrested subsequent to arrest warrants that have been issued. They are David Armando Torres and Sylvia Leon. Torres is the owner of Employer Support Group, a workers’ compensation consulting firm located in Montclair, and Leon is an employee of that business. Torres and Leon have each been charged with 51 felonies, 50 counts of failure to disclose facts regarding insurance benefits (Penal Code section 550 (B)(3)) and one count of unlawful transaction of insurance business (Insurance Code section 700)
Based on the investigation in this case, it is alleged that Trealoff misclassified an estimated 15 to 20 percent of the approximately 200 employees at Eclipse and failed to report more than 50 injuries to employees. The charged crimes happened over the years 2012 to 2016. It is alleged that Torres and Leon, through their company, assisted Trealoff in not lawfully reporting industrial injuries to insurance companies.
The charged crimes resulted in more than $540,000 in losses to Everest National Insurance Company and Security National Insurance Company.
The case was investigated by the Inland Empire Premium Fraud Task Force composed of
investigators from the California Department of Insurance, the Riverside County DA’s Office, the San Bernardino DA’s Office, the state Employment Development Department and the state Franchise Tax Board. The case, RIF1700031, is being prosecuted by Deputy
District Attorney Courtney Breaux of the DA’s Insurance Fraud Team.
Matthew Pappalardo, of Nassau County, was sentenced for the Unauthorized Practice of Engineering after admitting to altering an engineering report prepared in connection with the assessment of structural damage of residential properties resulting from Superstorm Sandy, according to New York Attorney General Eric T. Schneiderman.
Papparaldo was the former Project Manager for Uniondale engineering firm HiRise Engineering, P.C. In January, HiRise pleaded to the violation of Criminal Solicitation in the Fifth Degree, and agreed to be permanently banned from receiving contracts and providing services under the Federal Emergency Management Association’s National Flood Insurance Program.
In August 2016, the Attorney General’s Office announced the unsealing of an indictment from a Nassau County Grand Jury charging Pappalardo and HiRise with multiple counts of Forgery in the Second Degree, a class D Felony, and charging Pappalardo with multiple counts of Unauthorized Practice of Engineering, a class E Felony.
As prosecutors stated at the arraignment on the indictment, after Superstorm Sandy in October 2012, HiRise was contracted to perform structural engineering assessments for properties covered under the National Flood Insurance Program. HiRise, in turn, retained numerous licensed professional engineers to perform house inspections and prepare engineering reports.
The original reports authored by the on-the-ground, subcontracted professional engineers were altered by employees of HiRise, under the direction of project manager Pappalardo. Pappalardo and the other HiRise employees who made the alterations to the original reports did not personally inspect the damaged buildings and were not licensed to practice engineering in New York State. The altered reports were then submitted by HiRise, and ultimately provided to the adjusting firms, without the consent or approval of the underlying professional engineers. Federal flood claim administrators and adjusting firms then relied on these reports as part of their evaluation of coverage for homeowners under the NFIP.
On January 10, 2017, before the Honorable Jerald S. Carter in Nassau County Supreme Court, Pappalardo pleaded guilty to Unauthorized Practice of Engineering, a Class E felony, and today was sentenced to three years’ probation and a fine in the amount of $10,000. Also in January 10, 2017, HiRise pleaded to Criminal Solicitation in the Fifth Degree, a violation, agreed to be permanently banned from receiving contracts and providing services under the NFIP, and paid $225,000 in costs of prosecution.