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Los Angeles

Janitorial Firms Face Fraud, Theft Charges in Labor Case

September 21, 2002|ANNA GORMAN | TIMES STAFF WRITER

The Los Angeles County district attorney's office has filed tax fraud and grand theft charges against three Palmdale janitorial companies and their top officials for underpaying workers and failing to pay taxes and unemployment insurance.

The companies failed to pay at least $900,000 in taxes and insurance premiums to the state, prosecutors said. They said the alleged fraud went back as far as 1997.

Jaime Huerta and Micaela Rivera Escovedo, who own the businesses, along with employees Jose Roman Berumen and Diana Yazmin Armenta, pleaded not guilty Friday in Los Angeles County Superior Court. The defendants, who were being held in county jail, were arrested after a lengthy investigation by the district attorney's office.

A fifth suspect, Julio Bravo, was being sought Friday.

Huerta and Escovedo operated Sun Janitorial Professionals Services, Speed Janitorial Services and A Janitorial Professional Services. Berumen managed the companies and Armenta was a bookkeeper, prosecutors said.

The charges include workers' compensation fraud, grand theft of labor, and failure to collect, account or pay tax. The defendants are scheduled to return to court Sept. 30 for a bail review hearing.

According to prosecutors, the subcontracting companies underbid other companies by paying their employees far less than minimum wage and not paying them overtime. The companies also failed to pay unemployment insurance and disability, and did not report correct payroll for workers' compensation insurance, said Deputy Dist. Atty. Barry Gale.

Many of the 517 victims were immigrants who got "cheated to a large degree," Gale said. "It's a shock to see these people getting $4 an hour. Certainly they don't have any hope of getting the American dream on that."

Prosecutors have also been investigating Houston-based Encompass/Building One Service Solutions for possible wage, tax and insurance fraud involving janitors at supermarkets and discount stores. Two of its subcontractors were convicted last year of felonies, including "theft of labor" for underpaying their workers.

The district attorney's office has been working with several agencies, including the state Employment Development Department and Department of Insurance, and the U.S. Department of Labor in investigating the janitorial industry.

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