Southern California Couple and Business Partner Sent to State Prison in Multi-Million Dollar Payroll Fraud Scheme
SACRAMENTO - Cheating is turning out to be a lesson in hard time for a Southern California couple and their business partner who were trying to make a big fortune off the recent bark-beetle tree infestation in the San Bernardino National Forest. Besides having their Contractors State License Board (CSLB) licenses taken away, operators of the Denise Mowbray Tree Company (Arrowhead Tree Services) have been sentenced to long state prison terms for trying to cheat California out of almost $5 million dollars.
Denise and Richard Mowbray and their General Manager James Carroll Williams tried to cash in on lucrative contracts for removal of dead trees by using unskilled workers, paying employees in cash under the table and under reporting payroll figures. CSLB's help with the investigation was instrumental in prohibiting the trio from getting any more contracts and continuing their scheme to cheat the State.
The Norco-based small operation was boosted into a $25 million dollar business in 2004 with the contracts to remove dead trees caused by the beetle infestation. The company did not report accurate employee numbers (they had up to 600 employees at one point) to the State Compensation Insurance Fund, which enabled them to pay lower premiums. They would also switch injured employees over to the payroll of another company so it wouldn't show on the records.
The long prison sentences were handed down in late August after the trio entered guilty pleas to more than 80 counts against them. Richard Mowbray received the longest term of 12 years and 8 months; his wife Denise Lynne Mowbray received 9 years 8 months. James Williams who had turned the Mowbrays into the Riverside District Attorney's Office received a 9 year term. The judge also called for immediate revocation of their contracting licenses: 839212, 835571 and 720605.
Riverside County authorities were quoted as saying this was one of the largest and most sophisticated payroll schemes in their area. "Our partners in the law enforcement are looking much closer at contracting violations" said CSLB Registrar Steve Sands "The money siphoned away from workers compensation, taxes and insurance end up costing the honest contractors who are trying to do things the right way. The public also gets cheated when those tax dollars don't go towards, schools, law enforcement or roads."
The CSLB has a strong commitment to going after cheaters in the underground economy and routinely conducts stings or sweeps that focus on unlicensed activity. The CSLB is also a key partner in Governor Schwarzenegger's Economic and Employment Enforcement Coalition, that routinely conducts sweeps with partners from the Department of Industrial Relations' Division of Occupational Safety and Health, Division of Labor Standards Enforcement, and the Employment Development Department in industries like construction, garment manufacturing, and agriculture that are prone to illegal business practices.
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