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Contractor, Family Sentenced for Fraud

Wednesday, October 30, 2013

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A California home-improvement contractor, his daughter and son-in-law have all been sentenced for failing to pay payroll taxes and workers’ compensation insurance premiums.

Jeff Thranow, 59, the owner of Costa Bella Builders, based in Aptos, CA, was sentenced on two felony counts of insurance fraud, according to media releases by the Santa Cruz District Attorney’s Office and California’s Department of Insurance.

Costa Bella Builders
Costa Bella Builders / Facebook

Jeff Thranow, 59, the owner of Costa Bella Builders, must pay $115,000 in restitution and spend one year in jail for two felony counts of insurance fraud, according to prosecutors in California. A post on the company's Facebook page (screenshot above) says that he was granted electronic monitoring instead of jail time.

Authorities said the licensed contractor paid employees in cash in an attempt to evade paying workers' compensation insurance. The investigation further uncovered evidence that Thranow, his daughter and son-in-law colluded to convince employees to accept these cash payroll payments.

In addition to paying $115,000 in restitution, Thranow was sentenced to one year in prison, the authorities said.

Owner: ‘Not Going Away’

However, on Oct. 21, the owner said on the company’s Facebook page, “As part of our plea agreement to pay all the fines and restitution up front we were granted electronic monitoring [in] lieu of jail time. So, I’m not going away. Best, Jeff.”

Assistant District Attorney Kelly Walker said that Thranow and his son-in-law will be subject to electronic monitoring and may not spend actual time behind bars.

Thranow has nearly 20 years of construction experience, according to his biography posted on his company website.

Family Members Sentenced

Thranow’s son-in-law, Vittorio Castelli, 34, was also convicted of one count of felony insurance fraud for his role in the case. He was sentenced to half a year in jail.

On Costa Bella Builders’ website, Castelli is listed as the senior project supervisor and described as a “born leader and gifted craftsman.”

Thranow’s daughter, Kathleen Castelli, 34, listed as the company’s production manager, was convicted of one count of misdemeanor insurance fraud in the case. She was sentenced to one year of probation.

The family-owned and -operated business calls itself a “home remodeling specialist” on its website and has a portfolio of residential remodeling and building projects throughout Santa Cruz County.

Fraud Uncovered

The convictions stem from an investigation launched in response to a November 2011 employee injury, according to the Oct. 22 announcement by the Department of Insurance.

Insurance Commissioner
California Department of Insurance

“Thranow cheated both his workers' compensation insurer and the State of California out of nearly $100,000, and by doing so passed the cost of his fraud onto consumers across the state,” says California Insurance Commissioner Dave Jones.

Thranow was alleged to have dissuaded the injured employee from filing a workers’ compensation claim and instead offered him a State Disability Form with instructions to claim the injury occurred while the employee was home.

Costa Bella Builders was ordered to pay over $47,000 in premium restitution, nearly $30,000 in back taxes to the Employment Development Department, and $37,000 in restitution related to the injured workers claim, according to authorities.

The Cost of Fraud

“Fraud is a multi-billion dollar enterprise, which artificially inflates costs to insurers, consumers, and California's taxpayers,” Insurance Commissioner Dave Jones said in a statement.

“Thranow cheated both his workers' compensation insurer and the State of California out of nearly $100,000, and by doing so passed the cost of his fraud onto consumers across the state.”

The case was investigated and prosecuted by the Department of Insurance and the Santa Cruz County District Attorney's Office.

   

Tagged categories: Business operations; Criminal acts; Insurance; Residential contractors; Workers

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