Ankeny Businessman Sentenced in Federal Court for Insurance Fraud

The Ankeny owner of DES Staffing Services was sentenced Friday to 57 months in prison for a fraudulent scheme to avoid paying $778,940 in workers compensation premiums to two insurance companies, according to a news release.

The U.S. Attorney's Office for the Southern District of Iowa said in its news release that Dinesh Sethi tried to avoid paying Travelers and Liberty Mutual Insurance companies.

Chief Judge James E. Gritzner also sentenced Sethi to a five-year term of supervised release, $778,940 in restitution and a $100 Crime Victim Fund assessment, court officials said.

Sethi directed the creation of two shell companies, Staffing Professionals and KDM Staffing, and transferred DES employees to those entities to avoid the larger workers compensation premiums DES owed as a result of its accident and claims history.

In addition, Sethi directed his chief financial officer, Randy Stringer, to shift payroll from job classifications which had a high premium rate to job classifications which had a lower premium rate, such as clerical, according to the U.S. Attorney’s office.

This investigation began after Sethi reported the embezzlement Stringer to the FBI. Stringer was prosecuted, sentenced, and has served his prison sentence but remains on supervised release.

Authorities said Stringer provided the FBI with documentation of the payroll shifting and the shell corporations.