Two Sentenced to 10 Years of Probation in $21 Million Insurance Fraud Scheme
“LOS ANGELES — John Nemandoust, 70, and Annette Assil, 62, a Los Angeles couple, were sentenced after a California Department of Insurance investigation found they underreported more than $21 million in employee payroll for their delivery companies. Nemandoust was sentenced to 60 days in county jail, while Assil was sentenced to 30 days. The pair were sentenced to 10 years of felony probation and also ordered to pay $2,254,748 in restitution for unpaid workers’ compensation insurance premiums.
The Department launched an investigation into A-1 Valley Services, Prompt Delivery, and Affordable Messenger, the three companies the couple owned, after receiving information that two of the companies were uninsured. The investigation revealed that between 2013 and 2017, the couple only obtained workers’ compensation coverage for Valley Services employees, while leaving Prompt Delivery and Affordable Messenger uninsured.
When employees from the uninsured companies sustained work-related injuries, they fraudulently filed claims under Valley Services’ policy, concealing the lack of coverage and misclassifying their workforce. Over the four-year period, at least 20 uninsured employees had claims improperly filed under Valley Services’ policy.
A forensic audit found that the companies’ combined gross payroll exceeded $25 million, while they only reported approximately $1.4 million to their insurance carrier—resulting in the $21 million payroll underreporting. This scheme allowed the couple to avoid paying approximately $3 million in workers’ compensation insurance premiums.
‘By misleading their insurance carriers, these business owners created an unfair advantage over their competitors and put their employees at risk,’ said California Insurance Commissioner Ricardo Lara. ‘This sentence ensures they are held accountable and must repay the stolen premiums.’
The Los Angeles County District Attorney’s Office prosecuted the case.”
