A Modesto motel owner may be in for an extended stay in jail after allegedly committing workers' comp insurance fraud.
Muhammad Hassan Raza must have had a vacancy between his ears when he stopped paying the workers' comp insurance for the Vagabond Inn that he co-owned. The two-star motel was insured by First Comp until payments stopped coming in and the policy was dropped in December of 2008.
Nearly a year later in August of 2009, one of Raza's employees was assaulted on the job, and was told to contact First Comp to collect benefits. Unfortunately because the Vagabond Inn's policy had, much in the manner of its name, come and gone, the injured employee had to pay her bills through her private health plan.
A man in the business of hospitality, Raza didn't allow her to foot the entire bill. The 36-year-old paid for the ambulance bill and some co-payments, along with a little extra money. Just like the mini-bar, though, nothing extra comes for free.
Raza allegedly offered the extra money to the injured employee in order to convince her to drop her claim. Raza then attempted to cover his tracks by applying for a workers' comp policy with State Farm in September of 2009. When asked if the Vagabond Inn had had any injuries within the last three years, Raza answered that they did in 2008, but failed to disclose the assault injury in 2009.
The victim of that assault must have had reservations about Raza's plan, because she did not drop her claim, but filed it with the Department of Industrial Relations Uninsured Employer Fund. Raza was arrested on September 24, 2010 for allegedly committing workers' comp insurance fraud.
He admits to knowing that he did not have a policy at the time of the assault, but explained that he was negotiating with First Comp and believed he could get it reinstated. Raza also admitted paying the injured worker's bills and salary while she was unable to work, but denies offering money in exchange for a dropped claim.
He was booked into the Stanislaus County Jail, with bail set at $15,000. If convicted, Raza faces fines of either $50,000 or double the amount of the fraud, whichever is greater. He will also enjoy a long stay in a room in state prison from two to five years.
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