Frances Ann Doherty, 51, of Millbrae, Calif., owner of Doherty Painting & Construction, has been arraigned in San Francisco Superior Court for 57 felony counts related to payroll theft and workers' compensation insurance premium fraud.

“The crimes we have charged against this employer are extremely serious,” says San Francisco District Attorney George Gascón. “This conduct not only victimizes workers who are desperately trying to make a living in a very tough economy, it also hurts the honest businesses that were unable to successfully compete for these projects which the defendant was able to underbid and win as a result of this scheme.”

Doherty Painting & Construction, a painting contracting company, was awarded numerous public contracts with the city and county of San Francisco, San Francisco Unified School District and other public agencies.

According to investigators, to win these contracts, Doherty falsely promised to pay her workers San Francisco's prevailing wage. Contractors on public work projects are required to pay their workers the prevailing wage and report to the public agency on a weekly basis that the appropriate wage is paid.

Job after job, however, Doherty allegedly submitted false documentation showing that she paid the wages. Over the course of three years the she underpaid her employees and pocketed more than $600,000, defrauding her workers' compensation insurance carriers out of more than $100,000 in insurance premiums. From Sept. 2006 through June 2009, she provided fraudulent employee payroll information to Redwood Fire & Casualty and Zurich Insurance companies.

The estimated loss to Redwood Casualty & Fire and Zurich Insurance is approximately $108,000. The estimated total loss in regards to insurance premiums and wages is approximately $700,000.

“The underground economy is a real threat to California's law-abiding businesses and owners,” says California Department of Insurance (CDI) Commissioner Dave Jones. “Rooting out these bad actors and the fraud they commit is a top priority of (the CDI).”

Source: California Department of Insurance

Special Reports /

California Business Owner Fakes Wages

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