Nailed: A fraud prevention and compliance blog

Written by Elizabeth Smith,
L&I's Assistant Director for
Fraud Prevention and
Labor Standards

Aug. 24, 2012

Worker’s fall leads to investigation, charges for roofing contractor

Prosecutors yesterday charged a Snohomish County roofing contractor with intentional false reporting, a class C felony, for failing to report his workers in an apparent effort to avoid paying workers’ compensation premiums for them.

David Erick Rau, doing business as Davey’s Roofing in Lake Stevens, was charged in Snohomish County Superior Court after a lengthy investigation by L&I. The arraignment is scheduled for Sept. 11. 

This case offers a classic example of how the underground economy can hurt honest employers and the workers’ comp system.

In April 2010, a man working for Mr. Rau fell from a roof and was badly hurt. Since then, payments for this injured worker, covering medical treatment and time-loss benefits, have reached more than $70,000 and costs go on mounting as he continues to recover.

However, it appears Mr. Rau has paid nothing into the workers’ comp system for years.

In 2001, L&I audited Davey’s Roofing, finding that Mr. Rau had failed to report 13 workers. He was fined $3,000 and educated on his responsibility to report his workers and pay workers’ comp premiums. Yet from then until the 2010 accident, Mr. Rau reported not a single worker.

Investigators found witnesses who confirmed that Davey’s Roofing employed multiple workers on various roofing jobs during that period. A subsequent audit completed in 2011 determined that Davey’s Roofing owed more than $150,000 in unpaid premiums and penalties.

For the time being, honest employers and workers are covering the costs of this workplace accident. But with the charges filed Monday, it is clear that Mr. Rau’s free ride is coming to an end.

Charging Information
Court Documents: Charging Information, Probable Cause Statement

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