7/27/2019 Costa Bella builders sentenced

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Press ReleaseFor more information contact: Kelly Walker, Assistant District Attorney (831) 454-2559

Local Builders Sentenced To Jail For Failure To Pay Payroll

Taxes And Workers Compensation Insurance Premiums

______________________________________________________Santa Cruz County District Attorney Bob Lee announced that local builders who failed to

pay worker's compensation insurance and payroll taxes were sentenced today. Jeff

Thranow, age 59, owner of Costa Bella Builders was sentenced on two felony counts of

insurance fraud. After paying almost $115,000 in restitution the defendant was then

sentenced to an additional one year in the jail. Other employees were also sentenced for

their role in the fraud. Vittorio Castelli was sentenced to 6 months in jail for one count of

felony insurance fraud. Kathleen Castelli was sentenced for one misdemeanor count of

insurance fraud and one count of failure to pay payroll taxes.

The California Department of Insurance [CDI], Morgan Hill Office, received informationfrom employees about possible insurance fraud. CDI and investigators from the Santa Cruz

County District Attorney Workers Compensation Fraud Unit secured search warrants for

the business records of the company. The joint investigation revealed multiple violations

relating to the payment of insurance premiums and payroll taxes. The Employment

Development Department [EDD] also joined in the investigation upon discovering the

defendants' failure to pay payroll taxes to EDD. The investigation uncovered the company

stopped paying payroll taxes and workers comp insurance and began paying employees in

cash. Defendants were ordered and paid $85,000 in premium restitution and back taxes of

almost $30,000 at sentencing.

Employers are required to register their businesses and to report and pay taxes to EDD for

all employees. Unemployment Insurance Code felony violations have a maximum penalty ofthree years in prison and/or up to $20,000 fine. Additionally, business owners and the public

need to be aware that California State law requires that all employers secure workers

compensation insurance for their employees so that there is an assurance of adequate

medical coverage and other benefits for employees for any work-related injuries that may

occur. Failure to secure workers compensation insurance has a penalty of up to one year in

jail and up to double the amount of the premium owed as a fine payable to

the California State Treasury for the Uninsured Employers Fund. The Workers

Compensation Unit of the District Attorneys Office investigates and prosecutes cases

involving applicant fraud, employer fraud, premium fraud, provider fraud and employers

who do not carry workers compensation insurance.

Anyone with any information regarding workers compensation fraud should contact theDistrict Attorney's office at (831) 454-2400 or the California Dept. of Insurance at (408)

201-8800