A judge has ordered the owners of a San Diego area roofing company to pay $3 million in restitution to the California State Compensation Insurance Fund.

San Diego Superior Court Judge William H. McAdam ordered Paul Frederick Mayer and David Gordon Archer, owners of Mayer Roofing, to pay full restitution to State Fund, plus $81,649 in investigation costs, after pleading no contest to felony charges of conspiracy and workers' compensation insurance fraud. Judge McAdam also sentenced the company owners to three years of summary probation.

Along with Mr. Mayer, 52, and Mr. Archer, 62, two other officials of the company were previously sentenced in this case.

Laura Elena Caballero, 36, and Judy Kay Toledo, 50, pleaded no contest to a misdemeanor charge of workers' comp insurance fraud and were both sentenced to three years summary probation.

The company officials were originally indicted by a California grand jury in February of this year. From 2001 to 2003, company officers were accused of creating a scheme that underpaid workers' comp insurance premiums by $3 million. They created false payroll records to understate the company's workers' comp premium.

"These unfair practices enable unscrupulous employers to underbid honest competitors," San Diego County District Attorney Bonnie M. Dumanis said in a statement. "This results in honest employers losing jobs and ultimately being driven out of business."

"Directly or indirectly, workers' compensation premium fraud harms the system," said State Fund President James. C. Tudor.

The fraud was first uncovered by a routine audit by the State Compensation Insurance Fund. State Fund investigators informed the San Diego County district attorney's office of their suspicions about the company's payroll and premium practices. Beginning in December 2004, the San Diego County district attorney's office and the California Department of Insurance served search warrants at six locations, including Mayer Roofing offices in San Diego, Riverside and Los Angeles Counties. They seized 187 boxes of evidence.

Mayer Roofing does business throughout Southern California and Fresno. It employs nearly 450 employees and is engaged primarily in new home construction. The company is headquartered in Escondido, Calif.

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Business Owners To Pay Calif. State Fund $3M Restitution

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