Local Construction Firm Owner Admits to Workers Comp Fraud

The owner of a Bay Area-based construction company is facing jail time, probation and about $250,000 in restitution fees for cheating the workers’ compensation insurance system and wrongfully firing injured workers.

Man Tat Szeto, 71, who owns MT Szeto Construction, admitted to his illegal behavior after multiple former employees reported in late 2018 they’d been fired after asking for medical treatment for injuries they sustained at work. Those employees also reported they often worked unpaid overtime, clocking upwards of 70 hours in a week, but only being paid for 40 hours.

But after a long week of overtime in a physically demanding industry, if a worker injured themselves while on the job and then told their boss, Szeto had a habit of simply handing the employee cash and then terminating them, rather than file a claim and risking an insurance premium increase, according to the Santa Clara County District Attorney’s Office.

“When unscrupulous employers refuse to pay fair hourly wages, cheat on taxes, and cover-up workplace injuries, they exploit vulnerable individuals as well as our community which must bear the cost of illegality,” Deputy District Attorney Mattia Corsiglia said in a prepared statement.

The DA got involved in the case after the California Contractors State License Board reported “suspicious activity” at a new—but so far unnamed—residential construction project in San Jose.

Szeto avoided about $86,000 in premium payments to his insurer by not reporting such injuries between 2016 and 2019, according to the DA’s office. He also laundered $165,000 by paying employees off “off the books.”

As part of his plea agreement, Szeto was charged with unemployment insurance tax fraud and money laundering and will spend five years on probation, nine months in county jail and pay restitution of approximately $250,000.

Janice Bitters is managing editor for Metro Silicon Valley. Email tips to [email protected]. Follow her on Twitter at @janicebitters.

15 Comments

  1. John Galt you don’t seem to understand that if a person is not working legally is not a defense regarding what this crime is so in other words your just trying to make an eexcuses

    This guy was a tax cheat and a money launderer. NO EXCUSE

  2. John Galt,

    Oh by the way, you and your friends are HIRING illegal workers because you BANK on them to never seek compensation because you intimidate them from goig to the authorities.

    Thus give an illegal worker grounds for citizneship because they become WITNESSES to a crime, please read this(https://www.nolo.com/legal-encyclopedia/u-visas-crime-victims-assisting-law-enforcement-who-is-eligible.html):

    “U Visa Eligibility Criteria

    In order to apply for a U visa using Form I-918, Petition for U Nonimmigrant Status, you must meet the following criteria and provide substantial evidence to U.S. Citizenship and Immigration Services (USCIS):

    You must have been a victim of a “qualifying criminal activity,” and this crime must have occurred in the United States or violated U.S. law. Indirect and bystander victims are also eligible to apply in certain circumstances. For example, a murder victim obviously cannot benefit from a U visa, but another person who witnessed the murder or a close family member who was impacted by it may have information that is helpful to law enforcement. For more on this, see Both Direct and Indirect Victims Can Qualify for U Nonimmigrant Status (U Visa).

    In the course of this criminal activity, you must have suffered substantial physical or mental abuse.
    You have useful information about this criminal activity (or if under age 16, your parent, guardian or “next friend” such as a counselor or social worker can provide this information for you).

    You (or your parent, guardian, or next friend) have been or will be “helpful” to law enforcement in order to bring the perpetrator of this crime to justice.

    You are admissible to the United States or you are applying for a waiver using Form I-192, Application for Advance Permission to Enter as a Non-Immigrant.

    You can apply for a U visa from within the U.S. or abroad at a U.S. consulate. Be sure to consult with an advocate familiar with U visas or an experienced immigration attorney who can help you with your application. Keep reading for more information on what evidence is necessary to prove that you qualify for a U visa.

    Thus once a witness, they are LEGALLY allowed to be in th U.S.

    THat means they cannot be prosecuted for being an undocumented worker, you really don’t understand the way things really work.

  3. John, I was a work comp fraud investigator fir 30 years. There is no selective enforcement. These guys are ripping off the taxpayers for hundreds of millions of dollars a year. They are the scum of the earth and everyone gets prosecuted. The fact that they hire undocumented workers is even more proof of their thriving ways because the taxpayers have to pay for their treatment when they are injured on the job. I suspect the irs will be coming after him next. He will lose his contractors license and will not be able to bid on any public works projects.

  4. Is ANYbody who hires an undocumented worker “scum of the earth”? If so, then what kind of position are we putting undocumenteds in when we effectively invite them to reside here by declaring ourselves a “sanctuary city”? What do we expect them to do for work if we’re focused on prosecuting anyone who would hire them?

  5. JOHN GALT you wrote:

    “Is ANYbody who hires an undocumented worker “scum of the earth”?”

    Actually YES, because they TAKE AWAY A JOB FROM A LEGAL WORKER. You wrote:

    “If so, then what kind of position are we putting undocumenteds in when we effectively invite them to reside here by declaring ourselves a “sanctuary city”?”

    NO ONE INVITED ANYONE, THE ILLEGAL HIRING OF THEM WAS ARRANGED BY ORGANIZED MOVEMENT OF EMPLOYERS AND “COYOTES”. You wrote:

    “What do we expect them to do for work if we’re focused on prosecuting anyone who would hire them?”

    Again, the biggest joke on you is this. These people are brought in by the illegal hiring groups, the illegal workers report them to the local prosecutors, then they get a U Visa for being a victim of trafficking and illegal hiring, which makes them LEGAL CITIZENS of the U.S.

    Talking about arguing the wrong ideas, or even not really understanding that you are part of a way to BYPASS other means of immigration. But more importantly, this practice is illegal and will cost the employers money and time in the custody of a correctional institution.

  6. If the employer is “scum of the earth” for taking a job away from a legal worker then isn’t the undocumented worker also “scum of the earth” for exactly the same reason?
    Just trying to understand yours and the DA’s logic.

  7. John Galt,

    You keep on trying to changre the subject don’t you I will repeat

    NO ONE INVITED ANYONE, THE ILLEGAL HIRING OF THEM WAS ARRANGED BY ORGANIZED MOVEMENT OF EMPLOYERS AND “COYOTES”.

    This is HUMAN TRACKING which is ALSO a crime. THe Employers are doing this to CUT COSTS and to try to have work done UNDER THE TABLE which not only is illegal, but is the worst demostration of WHITE COLLAR CRIMINALS out ther, Construction is a big abuser, so is hospitality work and even restruaunt cooks and cleaning.

    I already told you, that FEDERAL LAW establishes AUTOMATIC CITIZENSHIP for any UNDOCUMENTED WORKER that can demonstrat a employer hired them.

    Stop trying to avoid the subject, your simply plaung a “name-calling” game

  8. John Galt,

    You keep on trying to changre the subject don’t you I will repeat

    NO ONE INVITED ANYONE, THE ILLEGAL HIRING OF THEM WAS ARRANGED BY ORGANIZED MOVEMENT OF EMPLOYERS AND “COYOTES”.

    This is HUMAN TRAFFICKING which is ALSO a crime. THe Employers are doing this to CUT COSTS and to try to have work done UNDER THE TABLE which not only is illegal, but is the worst demostration of WHITE COLLAR CRIMINALS out ther, Construction is a big abuser, so is hospitality work and even restruaunt cooks and cleaning.

    I already told you, that FEDERAL LAW establishes AUTOMATIC CITIZENSHIP for any UNDOCUMENTED WORKER that can demonstrat a employer hired them.

    Stop trying to avoid the subject, your simply plaung a “name-calling” game

  9. This is an interesting time.

    Many businesses dropped their workers like a bad habit, and now expect them to return as if they are GRATEFUL to get their job back.

    Many workers are now in serious debt, or lost a lot of their retirement when THEY DIDN’T DO ANYTHING TO DESERVE LOSING THEIR JOB.

    So yes now that the power is shifted, because business will not get better until the WORKERS get back WHAT THEY LOST AND MORE GET PAID ENOUGH TO HAVE AN EMERGENCY FUND.

    But the companies are saying, THE WORKERS WON’T RETURN UNLESS THEY GET PAID BETTER THAN THEY WERE IN THE PAST, and if I cannot hire them, I need the Government to force them to work now.

    This is going to be an interesting situation

  10. John Galt,

    Very soon there will be a clarification where “gig” workers will be illegal all over the country.

    Look at Spain, not a very socialist country (https://abcnews.go.com/International/wireStory/spain-adopts-landmark-law-protect-gig-delivery-workers-77620461?cid=clicksource_4380645_6_heads_posts_headlines_hed):

    “MADRID — Spain approved a pioneering law Tuesday that gives delivery platforms a mid-August deadline to hire the workers currently freelancing for them and that requires transparency of artificial intelligence used to manage workforces.

    The new law approved by the center-left ruling coalition comes in the wake of a ruling by Spain’s top court last year and at a time when other countries in Europe and elsewhere are deciding on a labor model for the so-called gig economy.

    The government’s move has angered digital businesses and some food delivery workers who took to the streets on Tuesday in different Spanish cities because they say that remaining self-employed benefits them.

    Labor Minister Yolanda Díaz said Spain was the first country to take legislation on the relationship between delivery platforms and their workforce this far.

    “We are at the vanguard and the world is looking at us,” Díaz told reporters following a weekly Cabinet meeting.

    She said the move was an effort to protect the most vulnerable and that reflected the “new winds” that across the world were implementing trying to increase the wellbeing of citizens.

    “Workers cannot leave their soul on the keyboard of our laptops or on electronic gadgets,” Díaz said.

    The government’s law has been the result of an agreement with the country’s main workers’ unions and industry associations, although smaller groups representing Uber Eats, Deliveroo, Glovo and other main players in the market claim they have been sidelined in the negotiations.”

    Sooner or later the “gig” market will be forced to either reform or die.

  11. Hey all boss is in the United States know if they got a guy working for him under any circumstances even for one day and that guy or gal gets her he hast to pay Workmen’s Comp. I got a double shoulder injury I’m waiting for my third surgery and ny Workmen’s Compensation‘s Insurance carrier
    Isre so dishonest and cheating and intimidating and try to charge your private insurance company for all kinds of things they should pay these guys every penny that’s what it’s for and the bosses know it

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