Nailed: A fraud prevention and compliance blog

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

Nov. 16, 2012

Drywall Firm Fined For Underreporting—Prime Contractor Foots the Bill

Some people never learn

Maranatha Construction, and its sister company Maranatha Drywall, have been assessed by L&I for more than $426,000 in unpaid workers’ comp premiums and penalties.

Maranatha Construction failed to report drywall square footage for a large construction project in King County, while taking advantage of discounted drywall rates. L&I audited Maranatha Construction 3 times previously, educating the firm extensively on specific drywall reporting requirements.

A fourth audit turned up significant underreported drywall square footage, along with failure to report covered workers and misclassification of worker hours. The firm received an assessment of $406,796, which they did not appeal.

Meanwhile …

Crown Drywall Estimating, operating in Washington as Maranatha Drywall, had been audited twice previously. L&I again audited Crown in conjunction with the SAIF Corporation (Oregon’s “state fund” workers comp insurer. Crown, owned by a relative of Maranatha Construction’s owner, failed to provide records for this audit.

L&I pursued a civil action against Crown, resulting in total audit premiums and penalties of more than $19,000. Prime contractor liability of $18,373 for unpaid premiums was issued to Maranatha Construction, Inc.

These firms have since stopped doing business in Washington and collection action is in progress. One prime contractor, Walsh Construction, was held liable for more than $82,000 of Maranatha’s premiums, and we received their payment November 1, 2012.

Discuss this entry

Recent comments

In a tough economy, businesses are looking for ways to cut costs. Unfortunately, breaking laws is not a good way to go about it.

- Drew

Twitter talk

© Washington State Dept. of Labor and Industries. Use of this site is subject to the laws of the state of Washington.