2 men were shocked to death on the job. Their boss committed $100K in workers' comp fraud, DA says

The Riverside County District Attorney's Office has asked for an arrest warrant against Carlos Valencia, the employer of two men who were fatally electrocuted in March 2016 while pollinating palm trees in Thermal.

An investigation into the deaths of Osvaldo Ceron and Ernesto Hurtado found that Carlos Valencia, owner of Valencia Trimming in La Quinta, misclassified employees to make their jobs appear to be lower risk to his insurance provider and lied about employee pay, according to court documents filed by the DA's office.

Valencia deprived California's insurance fund for workers' compensation of $100,000 and cost the state more than $35,000 in unreported payroll taxes between 2012 and 2017, the arrest declaration says.

The district attorney filed the felony charges against Valencia, 49, on Dec. 7 with a recommended cash bond of $135,000.

Valencia Trimming employees Ceron and Hurtado were electrocuted while pollinating palm trees at 68600 Harrison Ave. in Thermal on March 12, 2016.

The two men were using a truck with a boom. Hurtado was maneuvering the boom when the bucket carrying both men made contact with a power line, according to the DA, shocking them.

Ceron fell from the bucket to the ground, where he was found dead by a third employee. Hurtado remained in the bucket, which caught fire while the group waited for the power company to shut off the power line. He was electrocuted and burned.

According to the DA, Valencia misreported both pay rate and worker classification to the State Compensation Insurance Fund, or SCIF, the $1-billion fund created by the state of California to provide workers' compensation coverage.

Employer insurance premiums are determined, in part, by each worker's classification and pay rate. It is considered fraud to underreport wages or classify workers in jobs that are deemed to be less dangerous, both of which reduce insurance costs.

But the discovery that an insurance policy was obtained through fraudulent means does not mean workers will be unprotected, said Jennifer Vargen, a spokesperson for SCIF.

In this case, both Ceron and Hurtado's beneficiaries have received death benefits, Vargen said. One of their cases has been closed and the other remains open.

In the case that a policy has been rescinded because it was found to be obtained by fraudulent means, workers can also receive benefits through the Uninsured Employers Benefits Trust Fund, which pays claims by employees injured while working for illegally uninsured employers.

"The system is designed to protect workers," Vargen said. "There is a backup."

SCIF issued Valencia Trimming an insurance policy effective in 2012. But Valencia "reported his payroll under landscaping and not tree trimming," a classification that lowered Valencia's insurance rate prior to the deaths of Ceron and Hurtado. Valencia later admitted to SCIF that "no landscaping operations are performed" by his business, according to the DA.

Valencia also underreported employee payroll wages to SCIF and to state tax authorities, the declaration says. For example, Valencia told SCIF investigators after the incident that Hurtado had earned $15,000 annually and that Ceron had earned $11,000 annually, but previously reported to SCIF that his business had no payroll wages during periods when one or both men were employees.

SCIF found that Valencia "never reported any payroll wages" to the Employment Development Department, California's largest tax collection agency.