Port trucking company owners arrested in criminal case for insurance fraud
Government investigations of port trucking companies continue, most recently landing two port trucking company owners in jail. The owners of Metro Worldwide, Inc, which operates at both the Los Angeles and Long Beach ports, were recently arrested for insurance fraud by the Los Angeles County District Attorney on April 28, 2016.
According to the Los Angeles District Attorney’s office, Alvin Shin Chen (54) and Fiona Xilin Chen (46) were each charged with 18 counts of workers’ compensation fraud and five counts of failing to pay taxes. They were arraigned on May 16 in Los Angeles County Superior Court, two weeks after state insurance department detectives arrested them at their La Canada Flintridge home. Deputy District Attorney Angela Brunson of the Healthcare Fraud Division is prosecuting the case.
This is also a company with safety violations that raise public safety concerns. According to Federal Motor Carrier Safety Administration records, Metro Worldwide has also had two crashes in the past 24 months and paid a $5,130 fine in 2011 for its drivers’ violations of hours of service regulations and driving while fatigued.
The co-owners of the company, which has a Clean Truck Program concession/registration from the Ports of Los Angeles and Long Beach, allegedly reduced workers’ compensation premiums by misleading their insurer about how many employees they had and what work they performed. According to reports, they paid cash to company drivers to avoid reporting them to the insurer and to reduce payroll taxes, said the Los Angeles County District Attorney’s Office.
Between 2009-13, the Chens underreported payroll by more than $4.6 million, which shorted their insurer out of more than $2.1 million in workers’ compensation premiums. If convicted as charged, they could face up to 36 years in state prison.
The Chens were each held on $950,000 in bail.