Staffing firm pays $20 million to settle fraud allegation

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A Bellflower company that provides temporary workers to businesses has agreed to pay $20 million in restitution and penalties in a workers’ compensation insurance fraud case brought by California Insurance Commissioner Steve Poizner.

Staffing Services Inc. was accused of underpaying premiums to the State Compensation Insurance Fund, the state’s workers’ compensation carrier of last resort. Regulators filed charges against the company on Nov. 26, 2008, accusing it of misrepresenting the number of employees and their job descriptions so it would pay smaller insurance premiums.

‘Business owners have to realize that they have a moral and legal obligation to report the correct number and types of employees and then make sure they have adequate workers’ compensation insurance for those employees,’ said Poizner. ‘This is not a victimless crime. We all pay when a company chooses not to play by the rules as the rest of us.’

The Los Angeles County district attorney’s office prosecuted the case against Staffing Services, which was settled with a plea bargain on Jan. 15.

-- Marc Lifsher