Introduction
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Brothers Mark Hassan and Ahmed Hassan were arrested on suspicion of defrauding workers’ compensation insurance companies out of nearly $6 million in premiums.
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The scheme involved underreporting wages by more than $13 million and using “shell companies” to hide employee wages and avoid tax withholding.
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The investigation has now expanded to include a payroll tax evasion case involving the Employment Development Department.
Los Angeles – Two Southern California towing company owners face multiple felony counts of insurance fraud following a massive investigation into insurance premium theft.
Authorities accuse the brothers of systematically underreporting employees’ wages to avoid paying millions of dollars in required workers’ compensation insurance.
what we know
Mark Hassan, 46, and Ahmed Hassan, 35, were arrested after a California Department of Insurance investigation revealed they reported only $3 million in wages, when the actual figure was more than $16.7 million.
Mark Hassan allegedly used an uninsured “shell company” Courtesy Tow to conceal the income of employees at his main business, Hadley Tow.
The investigation further revealed that the brothers paid employees in cash and failed to withhold standard deductions.
Mark Hassan operated several towing companies in Los Angeles, including Hadley Tow, Courtesy Tow and California Coach Towing, and had active contracts with multiple Southern California law enforcement agencies at the time of his arrest.
what we don’t know
It’s unclear how long the alleged scheme had been operating before the first fraud referral.
While the Los Angeles District Attorney’s Office is prosecuting the case, specific trial dates and potential maximum sentences for each brother have not been made public.
what are they talking about
Insurance ministry experts stressed that this type of fraud “undermines the financial stability of the insurance system” and “passes costs on to other policyholders.”
Officials noted that such illegal practices create “unfair competition,” allowing fraudulent businesses to gain an advantage over ethical competitors while harming injured workers.
what’s next
The case was transferred to the Los Angeles District Attorney’s Office for prosecution.
Meanwhile, the Employment Development Department (EDD) is expected to investigate the brothers for tax evasion by failing to withhold employee taxes.
source
This report is based on information from the California Department of Insurance.
