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Insurance Commissioner John Garamendi Announces
Indictment of Eight Owners of a Massachusetts-Based Company
on 50 Felony Insurance Fraud Charges Resulting from a $60,000
Statewide Bicycle Courier Scheme
5/31/06, Sacramento, CA – Insurance Commissioner
John Garamendi today announced the indictment of eight Massachusetts
residents for insurance premium fraud charges. The eight owners
and employees of Massachusetts-based National Independent
Contractors Association (NICA) face arraignment today on 50
felony insurance fraud charges after being indicted by a San
Diego County grand jury on April 3, 2006.
The eight defendants are scheduled to be arraigned
this afternoon in San Diego Superior Court. The San Diego
County District Attorney’s office is prosecuting this
case. Defendants Thomas M. McGrath, 44; Eileen Rogantino,
42; Wesley McClure, 46; Daniel M. Curran, 53; Mary Jayne Graham,
51; Timothy F. Bergin, 36; Andrew Rogantino, 46; and David
B. Kenyon, 58, are charged with one count of conspiracy to
commit premium fraud; six counts of premium fraud; and 43
counts of filing false injury claims in a scheme totaling
more than $600,000 in losses from the San Diego District Office
of State Compensation Insurance Fund (SCIF). If convicted
of all charges, the defendants face up to 59 years in prison
and a fine of $1.2 million.
NICA is a privately owned company founded by
Thomas McGrath in the state of Massachusetts. It was incorporated
in 1995 and hailed itself as an alliance of independent contractors.
NICA does business throughout the country and contracts with
courier, messenger and delivery service companies in order
to convert their employees into independent contractors.
On October 2002, defendants McGrath and Rogantino,
officers of NICA, contacted a San Diego County insurance broker
to apply for and receive a workers’ compensation insurance
policy from the San Diego District Office of SCIF. Over the
course of the next year, NICA reported 47 claims for injured
workers whom in fact were injured, however not all 47 workers
were employed with NICA. In actuality, NICA employed only
a few of the 47 employees. These workers’ comp claims
involved bicycle, motorcycle and motor vehicle couriers.
“This company prided itself on malpractice.
Not only did the company file bogus worker’s comp claims,
but they also ripped off SCIF by making SCIF pay out $600,000
in losses,” said Insurance Commissioner John Garamendi.
“This type of fraud is deplorable and clearly illustrates
the peril that we all face because of some people’s
unscrupulous and illegal actions.”
The California Department of Insurance assisted
in this investigation and worked with the Massachusetts State
Police in obtaining and serving a search warrant for the office
of NICA.
“This major investigation was successful
because of tremendous help from the California Department
of Insurance, with assistance from the Employment Development
Department and the State Compensation Insurance Fund,”
said District Attorney Bonnie Dumanis.
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