Zaval-Tex Construction Indicted on Fraud Charge

June 5, 2003

Mary Lou Mott, owner of Zaval-Tex Construction Company, and her office manager, Louise Humberson, are facing felony charges following a Travis County, Texas grand jury indictment. Mott and Humberson allegedly committed fraud by filing workers’ compensation claims for employees not covered by their company’s policy.

According to Texas MutualSM fraud investigators, Mott and Humberson allegedly filed claims for employees who worked for another commonly owned company, Zavalla Associates. Zavalla Associates provides labor for Zaval-Tex Construction. By using Zavalla Associates in this manner, Mott and Humberson were reportedly able to substantially lower Zaval-Tex’s premium while leaving Texas Mutual Insurance Company liable for any injuries sustained by Zavalla Associates workers.

Mott and Humberson allegedly hid this exposure from Texas Mutual Insurance Company to obtain a lower premium, inconsistent with the amount of risk for that many workers. During two policy years, Mott and Humberson filed 83 claims with Texas Mutual Insurance Company, totaling $1,942,794.