Insurance Fraud George Osumi

A construction business owner is scheduled for arraignment Wednesday on charges that he under-reported over $3.5 million in payroll to his workers’ compensation insurance carrier.

George Osumi II, 64, of Irvine, was indicted on numerous felony counts of misrepresenting facts to State Compensation Insurance Fund; failing to file a return with intent to evade tax; and willful failure to pay tax, unemployment insurance, and disability insurance deductions, according to the Orange County District Attorney’s Office.

He was also charged with one felony count of identity theft and one felony count of perjury.

Osumi faces sentencing enhancement allegations for misrepresenting facts to the state insurance fund, committing an aggravated white collar crime over $500,000, property damage over $65,000, and committing a crime while released from custody on bail on another felony.

If convicted, Osumi faces a sentence ranging from probation to 63 years in state prison.

Between 2001 and 2011, prosecutors said Osumi created companies under the ownership names of family and close friends to avoid tax liability while personally operating his businesses. From December 2001 to March 2006, prosecutors said Osumi committed worker’s compensation insurance premium fraud by reporting his payroll to SCIF at just over $1 million. This resulted in a loss of over $814,000 in premium owed to the insurance fund, prosecutors said.

Osumi is also accused of obtaining an American Express card under the name of one of his former business associates and making unauthorized purchases, the District Attorney’s Office said.

According to the district attorney, Osumi committed perjury under the California Contractors State License Board contract code by declaring and stating as true a material matter he knew was false: that he did not operate a business which required workers’ compensation insurance.

Between 2009 and 2011, Osumi is accused of withholding state taxes and disability insurance benefits payments from his employees and not forwarding these withholdings to the state or filing payroll reports.

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