Monterey County Contractor Accused of Leaving Workers Without Workers’ Comp

A longtime Monterey County, Calif., construction contractor is facing charges that he has not insured his employees for on-the-job injuries, according to the California Department of Insurance. Herman L. Johnson, 64, of Marina, Calif., is scheduled to appear in Monterey County Court on Jan. 23, 2007, to enter a plea.

According to the Department of Insurance investigators, Johnson had been doing business in Monterey County for approximately 26 years as Buzz’s Drywall. He allegedly hired and employed staff, for many years, without providing workers’ compensation insurance. Johnson has been charged by the Monterey County District Attorney’s Office with four felony counts of committing perjury on a contractor’s license application and several renewal applications for a partnership that never existed; four misdemeanor counts of failing to provide for workers’ compensation; one misdemeanor count of fraudulent use of a contractor’s license number; one misdemeanor count of contracting without a license; and one misdemeanor count of unlawful advertising.

According to investigators, on March 14, 1980, Johnson obtained a state contractor’s license as a sole owner of Buzz’s Drywall. When Johnson’s license lapsed 10 years later, he continued to operate his business, employing uninsured workers until he encountered legal problems in 2000. Needing to show he had a contractor’s license, Johnson recruited a friend who had an active license and convinced him to form a dummy partnership in order for Johnson to get a new expedited license from the Contractors State License Board (CSLB). With the aid of his friend, Johnson circumvented the license requirements and ran his dummy partnership for years, renewing the license every two years, and each time certifying under penalty of perjury that he and his friend were running the business together. In addition, Johnson had filed with the CSLB a certification that he was not employing any persons as to be subject to the workers’ compensation insurance requirements. That certification and Johnson’s license were both found to be phony when Johnson was recently caught on a job site in Pebble Beach with a handful of workers hanging drywall. Some of the workers reported they had been working for Johnson for years.

Johnson was first arraigned on Jan. 9, 2007, but did not enter a plea at that time. He will return to court on Jan. 23, 2007 for further arraignment. The potential loss in this case is estimated at more than $64,219.

CDI estimates there are 800,000 employers in California, and approximately 30 percent do not have workers’ compensation insurance.

Source: CDI