Two brothers, who own a number of towing companies across Southern California, were arrested after being accused of lying about employee payroll and defrauding insurance companies out of nearly $6 million of insurance premiums, state authorities announced Wednesday.
The California Department of Insurance said Mark Hassan, 46, of Corona Del Mar and Ahmed Hassan, 35, of Walnut, underreported employee payroll by paying their workers under the table, thus paying lower workers’ compensation insurance premiums.
The investigations were launched against the brothers after the Insurance Department received three fraud referrals, prompting officials to examine several companies owned by the brothers, including Hadley Tow in Whittier and California Heights Tow in Walnut.
In all, the Hassan brothers reported a total payroll of $3 million to their insurance companies, but an audit showed their…
This type of fraud targets the supply chain and accounts payable departments of businesses.
- Invoice Manipulation: Criminals intercept a legitimate invoice between a supplier and a client and change the banking details to their own. The client pays the bill thinking they are paying their trusted vendor.
- Kickbacks and Bribery: A vendor secretly pays an employee of the purchasing company to ensure their bid is successful or to overlook inflated pricing.