Owners of one of Coachella Valley's largest landscaping firms must stand trial on felony charges for allegedly ripping off a half-dozen insurance companies, a judge ruled Thursday.
Jesse Garcia Contreras, 58, of Indio, and his son, 33-year-old Carlos Contreras of Bermuda Dunes, could each face 20 years in prison if convicted of six counts of workers' compensation insurance fraud that resulted in losses totaling roughly $600,000 to the firms.
Following a daylong preliminary hearing at the Riverside Hall of Justice, Riverside County Superior Court Judge Rafael Arreola found there was sufficient evidence to bound the pair over for trial. Arreola scheduled a post- preliminary hearing arraignment for April 25.
Each defendant remains free on $100,000 bail.
During the hearing, witnesses testified about the nature of the alleged fraud, which the District Attorney's Office said was based on how the defendants classified employees of Thousand Palms-based Sunshine Landscaping.
The company employs close to 400 people, serving homeowners' associations throughout the desert region, according to Deputy District Attorney Mike Mayman.
Mayman said by designating more employees as gardeners rather than tree trimmers, the defendants enjoyed lower deductibles and premium payments for workers compensation insurance coverage.
"Tree trimmers fall out of trees. They get hurt. They're more expensive to insure," Mayman said. "It's the same thing for anybody who works at altitude -- roofers, high-rise builders, trapeze artists. Their costs are higher because they fall. Unlike gardeners, who are picking around on the ground."
The Contrerases have run Sunshine Landscaping since 2001. According to the prosecution, the alleged fraud occurred between January 2008 and March 2012.
The firms allegedly shortchanged during that time were the San Francisco- based State Compensation Insurance Fund, CastlePoint Insurance, Liberty Insurance, Lumberman's Insurance and Zenith Insurance.
The latter began its own inquiry into possible fraudulent activity, and based on its findings, contacted the California Department of Insurance and the District Attorney's Office. An 18-month investigation ensued, culminating in charges being filed against the father and son.
Jesse Contreras is Sunshine's chief executive officer, while Carlos Contreras is chief financial officer.
Sunshine Landscaping contracts with many homeowner's associations and businesses in the Coachella Valley, according to Hall and the company's website.
Several of those locations are located here in Palm Desert, according to their website:
- Chaparral Country Club
- El Paseo Village
- Indian Ridge Country Club
- Monterey Country Club
- Oasis Country Club
- Palm Valley Country Club
- The Gardens on El Paseo
- The Lakes Country Club
- Woodhaven Country Club
Attorneys for the two men deny there was any wrongdoing and Thursday questioned whether investigators misinterpreted how employee classifications were determined.
– City News Service contributed to this report.