San Jose father and son charged in alleged $4 million insurance fraud scheme

A San Jose father and son duo were charged for their alleged participation in a $4 million scheme in which they avoided paying worker’s compensation insurance premiums for their employees, according to the Santa Clara County District Attorney’s Office.

Edgardo Cabrales Sr., 61, and his son, Edgar Cabrales Jr., 36, were each charged with five counts of insurance fraud. Prosecutors said both men are owners of two San Jose commercial cleaning companies: Pine Building Maintenance and Network Facility Management.

The DA’s office said the pair failed to report employee wages in order to save $4.2 million on insurance premiums, securing insurance for only some of the workers at Pine Building maintenance, and failing to get any insurance for employees at Network Facility Management “even though most of their business was operated through NFM.”

Edgardo is expected to be arraigned in December, while Edgar was arraigned this week. Both are facing potential prison sentences, fines and restitution, prosecutors said.

“Workers’ Comp insurance is money that is used to help injured employees get medical care and stay financially afloat while they recover,” District Attorney Jeff Rosen said. ”People who illegally avoid paying proper premiums are cheating the insurance companies, their workers, and every business that plays by the rules.”