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Drywaller Docked $1M in Comp Fraud

Tuesday, April 21, 2015

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TUMWATER, WA—A former drywall contractor who misclassified his employees and lied about their work hours in order to duck workers' compensation will pay more than $1 million to make good in the case.

The Washington State Board of Industrial Insurance Appeals is holding Shawn A. Campbell and his wife personally liable for unpaid premiums, interest and late penalties racked up by his company, E & E Acoustics LLC.

The judgment is believed to be one of L&I’s largest ever, in holding an employer personally liable for his company’s workers’ comp premiums.

Drywaller
©iStock / casper

Authorities said Shawn A. Campbell (not pictured) falsely listed his employees as co-owners of his company to avoid paying workers' comp premiums.

“This is a particularly egregious case of an employer cheating the legitimate businesses and employees who fund the workers’ comp system,” said Elizabeth Smith, assistant director of L&I Fraud Prevention & Labor Standards.

“The board found that Mr. Campbell clearly knew what he was doing in his attempt to skip out on paying workers’ comp premiums.”

Underreporting and Appeal

A Washington State Department of Labor & Industries (L&I) investigation determined that Campbell’s company significantly underreported the hours that its employees worked by failing to accurately report the size of the company’s drywall jobs from April 2007 through June 2009.

The agency says Campbell owed L&I more than $615,000 in premiums, $102,000 in late penalties and $296,000 in interest as of mid-March. Any money recovered in the case will be returned to the state workers’ compensation fund.

ToppenishHS ToppenishHS

E&E Acoustics' projects included the $18 million, five-building remodel of Toppenish High School in Walla Walla, Washington State labor officials said.

Chervenell Construction

Campbell has appealed the ruling to Walla Walla Superior Court, L&I reported. He could not be reached for comment, and the company has been dissolved.

Employees Misclassified

In filings to the Secretary of State, Campbell sometimes listed his employees as co-owners to avoid paying workers’ comp premiums on them, the board decision said.

However, in 2011, he failed to list any company officers, prompting the Secretary of State to “administratively dissolve” the business, the state said.

L&I then assessed Campbell and his wife personally for the company’s debts after it was no longer operating and the debts remained unpaid.

The board decision said Campbell’s “failure to pay workers’ compensation assessments was the result of an intentional, conscious and voluntary course of action, and thus was willful.” But the board did find Campbell not personally liable for other fees and a record-keeping penalty, which had totaled nearly $39,000. 

Union Assist

The Pacific Northwest Regional Council of Carpenters played a major role in assisting L&I in the case, the state said.

PacificNWRegionalCouncilOfCarpenters
Pacific Northwest Regional Council of Carpenters

Authorities credit the Pacific Northwest Regional Council of Carpenters with uncovering the fraud. Washington State labor officials actively urge reporting of any kind of workers comp fraud.

From 2009 to 2012, union representatives witnessed Campbell’s employees working on job sites in Central and Eastern Washington, and researched job bids and other public documents. The 2009 jobsites included the Yakima Walmart Super Store, Toppenish High School, Union Gap Kindergarten, and Yakima Wheatland Bank.

“Mr. Campbell created an unfair advantage through unlawful practices which harm the state and, more importantly, honest tax-paying construction contractors who contribute to a successful economy,” said Ben Basom, the union’s communications director.

"We wish the E&E Acoustics case was an anomaly. Unfortunately, there are other unscrupulous contractors operating in similar ways.” 

   

Tagged categories: Drywall; Enforcement; Fraud; Health and safety; Workers

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