Fri. Jun 14th, 2024

SANTA ANA, Calif. – The Orange County District Attorney’s Office has recovered $5.2 million in unpaid workers’ compensation payments from a former Orange County Reserve Sheriff’s Captain who intentionally underreported the number of unarmed security guards he had working for him and his payroll in order to avoid paying $17.2 million in insurance premiums. An additional $8.56 million in additional restitution is expected to be paid by the defendant when he is sentenced in May.

Simon Semaan was charged on September 8, 2021 with seven felony counts of Insurance Fraud Section 11760 – one count for each policy year in which he intentionally and falsely underreported his payroll and the number of employees to two different workers’ compensation carriers in order to substantially lower his premium payments.

Semaan was charged with the white collar crimes enhancement pursuant to Penal Code section 186.11 because the loss in the case was over $500,000. Semaan faced a maximum exposure of 16 years in state prison. OCDA seized $9 million dollars of the defendant’s assets to ensure the victims received restitution in this case.

Semaan ran Pacwest Security (d.b.a PSMG, Inc., PS, Inc., PSSA, Inc.)- a company providing licensed unarmed security guards to more than 40 clients, including Coca-Cola, the City of West Hollywood, United Port of San Diego, Cushman & Wakefield, Inc. and the Water Replenishment District of Southern California. Semaan is a former Orange County Reserve Sheriff’s Captain.

“By underreporting payroll and employees, this business owner not only broke the law, he also put honest businesses at risk,” said California Insurance Commissioner Ricardo Lara. “It is crucial we protect California consumers who pay the price for this type of fraud through higher insurance premiums and increased costs.”

“The Orange County District Attorney’s Office is committed to ensuring a level playing field for business owners,” said Orange County District Attorney Todd Spitzer. “By prosecuting bad actors, we are standing up for law-abiding business owners so that they can continue to remain competitive and support their families in an honest and upstanding way.”

Per Worker’s Compensation Insurance Rating Bureau information, Semaan carried a workers’ compensation policy for a company called PSSM, Inc. with QBE-Praetorian insurance company (QBE) between May 2013 and May 2017, and Redwood Fire and Casualty, between May 2017 and May 2020. During those seven policy years, the defendant intentionally and falsely underreported his payroll and the number of his employees to both workers’ compensation carriers in order to substantially lower his premium payments and avoid paying a combined $17 million in insurance premiums.

On March 3, 2022, Semaan pled guilty to a court offer that required him to plead guilty to all the charged counts and enhancements. In exchange the Court will sentence him to up to 365 days in custody to be served via electronic monitoring and grant him probation. The Court ordered the defendant to pay victim QBE $5.2 million and Redwood Fire and Casualty up to $8.56 million in restitution.

On March 11, 2022, Semaan paid $5.2 million dollars in restitution to QBE as ordered by the Court. Restitution payments of $8.56 million is expected to be paid to Redwood Fire and Casualty by the time Semaan is sentenced. Sentencing is scheduled for May 13, 2022.

This case was investigated by OCDA’s Insurance Fraud Unit Investigators Valencia Smith and Jeff Stuart. Deputy District Attorneys Tasha Soroosh and Erika Pennington prosecuted this case.

By Editor

The New Santa Ana blog has been covering news, events and politics in Santa Ana since 2009.

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