Walnut Creek Company Owners Charged In $5M Fraud: DA

WALNUT CREEK, CA — The former owners of Signature Painting and Construction Inc. of Walnut Creek have been charged in "an organized insurance and workers’ compensation fraud scheme that defrauded insurance carriers over $5 million in estimated losses," according to the Alameda County District Attorney's Office.

While the company is based in Contra Costa County, it operated throughout the Bay Area.

Charges against the painting company's former owners Eric Andrew Oller and Brian Christopher Mitchell were announced by the Alameda County District Attorney’s Office and the California Department of Insurance. The men are each charged with six counts of felony insurance fraud, two counts of workers’ compensation fraud, and one felony count of conspiracy to commit a crime.

Yama Sekander, owner of A-1 World Class Painting in Concord, was also charged with one count of felony workers’ compensation fraud.

Prosecutors allege that A-1, along with Valhalla Consulting of Walnut Creek which is owned by Oller, were used as shell companies by Mitchell to pay employees at SPC.

SPC allegedly paid its employees using VC’s bank account, with the intent to illegally reduce its workers’ compensation insurance premium. It's further claimed that SPC misrepresented information or didn’t include information about its company structure and payroll costs to its insurance carriers in order to illegally reduce its insurance premiums.

“If a business creates an environment where they falsely pay a lower insurance premium, that company has an unfair competitive advantage over one that is law-abiding,” said District Attorney Nancy E. O’Malley.

Mitchell is accused of misclassifying several employees to lower premium costs.

“Fraud hurts consumers and businesses. It puts a strain on our economy as legitimate businesses are forced to pay for the cost of fraud through higher insurance premiums,” said Insurance Commissioner Ricardo Lara.

Some employees at SPC were paid “under the table” so that the company could avoid paying or reporting the proper taxes, according to the charges. The defendants also allegedly instructed some injured employees to report working for one company, while they actually worked for another.

Insurance carrier SCIF suffered a loss of approximately $3.1 million in premium payments while AmTrust loss was approximately $1.9 million as a result of this fraud scheme, according to the charges.

Investigators say the fraud began in 2015 but it went undetected until 2019 when the State Compensation Insurance Fund submitted a fraud referral to the California Department of Insurance.

All three defendants were arraigned Monday morning.

They are due back in court on Nov. 18.