South Bay child therapist to be sentenced for insurance fraud

(KRON) — In two separate workers' compensation insurance fraud cases, a Santa Clara County child therapist, as well as two San Jose businessmen, are slated to be sentenced for committing felony fraud.

Mark Anthony Ramos, 50, of Escondido, owner of Stars Bay Area Therapy Group, will be sentenced in August to three years in prison, the district attorney’s office said.

Edgardo Cabrales Sr., 62, and his son, Edgar Cabrales Jr., 37, will be sentenced this week to a decade of probation for their $4 million scheme orchestrated through their commercial cleaning companies. Prior to pleading guilty, they paid over $1 million in restitution.

District Attorney Jeff Rosen said these cases illustrate the “peril” of failing to maintain mandatory workers' compensation insurance to cover their employees in the event of an accidental on-the-job injury.

"If you don't pay to protect your employees, you will pay in a far more serious way,” Rosen said. “People who illegally avoid paying proper premiums are cheating the insurance companies, their workers, and every business that plays by the rules.”

Ramos pleaded guilty early this year to insurance fraud. Stars Bay Area operated in Santa Clara County, Hollister, and Southern California providing therapy to children from birth to 3 years for behavioral, occupational, and pediatric speech needs.

From 2015 to mid-2022, Ramos defrauded his workers’ compensation insurance carriers by significantly underreporting employee payroll. His tactics included using different corporate names, underreporting employees, and falsely claiming that employees only provided telehealth services, when in reality, they worked directly with children in the field.

The District Attorney's Office's said its investigation benefited when a Stars staff member “inadvertently” sent a correct payroll number of approximately $3 million to a carrier, revealing a vast discrepancy compared to the initial $132,000 previously reported by Ramos.

When confronted, Ramos simply exclaimed, “How’d the hell did you get that bill!?” according to the DA’s Office.

The Cabraleses own two commercial cleaning companies in San Jose: Pine Building Maintenance (PBM) and Network Facility Management (NFM). An investigation revealed that since 2016, the father and son had only secured insurance coverage for some of their PBM employees, but never secured a workers' compensation insurance policy to insure their NFM employees.

The father and son accomplices failed to report wages to SCIF to save money on insurance, resulting in $4.2 million in lost premiums, prosecutors said.

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