California man ordered to pay millions for contractor insurance fraud

When it comes to getting insurance, fraud doesn't pay. Richard Lopez Escamilla Jr. found that out in a big way.

The Fresno, California contractor was ordered to pay over 4 million dollars in fines, according to the State Department of Insurance, amidst allegations that that he lied to get lower rates. This gave him a financial and competitive advantage over honest companies, and allowed him to secure contracts he otherwise would not have been able to. The department also states that he committed other types of fraud, including altering the name of his company to deceive insurers into thinking that he was a new business that would qualify for low introductory rates. 

Not only did his crime have big financial consequences, it will also land Escamilla in prison. He was slapped with a six-year sentence in addition to the high penalties, based on evidence compiled by San Joaquin Valley Premium Task Force, a collaboration between state and local forces to combat worker's compensation fraud. 

"This is a win for California consumers, insurers and taxpayers," California Insurance Commissioner Dave Jones said in a statement Thursday. "This case isn't just about one crook who stole from two insurance companies. Business owners across the state end up paying the real price for workers' compensation fraud through higher premiums and those costs are passed to consumers."

By cutting corners on his California contractor insurance, Richard Lopez Escamilla landed himself in a world of trouble. Not only did it cost him millions in restitution, it also cost him years of his life and his entire business. 

 

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