According to CDI investigators, Bell Building MaintenanceCompany, through Chan and Kim, purposefully misrepresented thenumber of employees working for the janitorial company so as toreduce the proper rate of workers' compensation insurancepremium.

The payroll reports that Kim submitted to the State Fund from2000 to 20005 indicated that the company employed just two people:Kim and his wife. As a result, the company was only required to paythe minimum amount of premium to receive a workers' compensationinsurance policy during this period. However, the investigationrevealed that, in reality, Bell Building Maintenance Company was amuch larger operation. Bell actually employed hundreds of janitorsservicing numerous private companies and public entities in LosAngeles, Ventura, Orange, San Bernardino, and Riverside counties.Further investigation revealed that Chan, who is not Kim's wife,acted as the company's corporate president during this timeperiod.

A State Fund audit of documents seized by CDI personnel inOctober of 2006 determined that Bell intentionally underpaidpremiums from 1998 through 2006 in the amount of $4,466,936.52. Inaddition, a subsequent audit conducted by the California EmploymentDevelopment Department revealed that Chan failed to accuratelyreport employee wages and/or wage payments from April 2001 throughDecember 2006. This appears to have resulted in underpayingpayroll, unemployment insurance, and state disability insurancetaxes in the amount of $1,889,580.15.

Kim has been formally charged with one count of criminalconspiracy; ten counts of presentation of false/fraudulent writingto public entity; one count of misrepresentation to obtain a lowerrate with State Fund; and, one count of misrepresentation to obtaina lower rate with a carrier other than State Fund - all felonies.His bail has been set at $3.28 million.

Chan faces one count of criminal conspiracy; ten counts ofpresentation of false/fraudulent writing to public entity; onecount of misrepresentation to obtain a lower rate with State Fund;one count of misrepresentation to obtain a lower rate with acarrier other than State Fund; one count of failure to pay tax; onecount of false tax return; one count of failure to makecontributions; and, one count of failure to make contributions tothe Disability Fund - all felonies. Her bail has been set at $3.3million.

The Los Angeles County District Attorney's Office is prosecutingthe case. The California State Compensation Fund and EmploymentDevelopment Department (EDD) assisted in the investigation.