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Pradas for Prison Garb

Contractor and Wife Use Workers’ Compensation Funds for Luxury Items

A roofing contractor in Orange County, California who committed Workers’ Compensation Insurance fraud was sentenced to 10 years in prison and ordered to repay $500,000 to the state insurance fund.  The contractor’s wife is also charged in the case and faces a pre-trial mental health screening today. 

Michael Vincent Petronella, also known as Michael Constantine, and his wife Devon Lynn Kile were arrested in April 2009 following an investigation which began after one of Petronella’s employees sustained an injury on the job in March 2006.  At the time Petronella and Kile owned several businesses, one of which was Western Cleanoff, Inc.  The injured employee filed a claim with the State Compensation Insurance Fund (SCIF) using a payroll stub from Western Cleanoff.  When SCIF saw that this was a company which they did not insure, they suspected fraud and turned the information over to the Orange County District Attorney’s Office (OCDA) and Department of Insurance (DOI).  According to a press release from District Attorney Tony Rackauckas’ office, hundreds of thousands of dollars worth of jewelry, cash, and property was seized from the couple and held as collateral at the time of their arrest.  The release states:

“The couple, who lived in Laguna Hills at the time of their arrest, owned five properties in California and Texas and multiple luxury vehicles including a Bentley, two Ferraris, and a Range Rover. Between 2005 and 2007, Petronella and Kile spent more than $2.1 million on their American Express credit card for personal items. They spent thousands of dollars on jewelry, shoes, clothes, and other personal items at stores including Balenciaga, Bloomingdale’s, Chanel, Christian Louboutin, Gucci, Kitson, Neiman-Marcus, Nordstrom, Yves Saint Laurent, and others.”

District Attorney Tony Rackauckas is quoted as saying:

“This case is an outrageous example of a person who lavishly spent illegal profits on luxury goods by cheating the Workers’ Compensation Insurance system and legitimate businesses that play by the rules.  Cheaters who defraud the system will be trading in their Pradas for prison garb.

This is one of the largest Workers’ Compensation fraud cases to be uncovered so far.  There will undoubtedly be others exposed as crackdown on this contemptible practice continues.

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