Twelve counts in indictments relating to workers’ compensation premium fraud
On September 18, 2019, Attorney General Maura Healey announced indictments against Sovane Kien, 56, of Worcester for engaging in a six-year workers’ compensation premium fraud scheme.
Mr. Kien is the owner and operator of a temporary staffing agency, Peoples Temp Services, Inc. (People’s Temp), last located at 37 Fruit Street, Worcester. He incorporated People’s Temp, in Worcester, in June of 2009, as an employment and temporary staffing agency. His company holds an employment agency license that does not expire until July 6, 2020. However, on August 7, 2019, Mr. Kien filed a voluntary dissolution of People’s Temp with the Massachusetts Secretary of State.
On September 16, 2019, a Worcester County Grand Jury returned indictments charging Mr. Kien with six counts of Workers’ Compensation Fraud, five counts of larceny over $250, and one count of larceny over $1,200. The Worcester Superior Court has scheduled Mr. Kien’s arraignment on these charges for October 22, 2019.
Indictments allege a six-year scheme to underpay workers’ compensation premiums
The indictments allege that from August 2012 through August 2018, Mr. Kien fraudulently underreported People’s Temp’s number of employees and the amount that it paid these employees in annual premium audits conducted by its workers’ compensation insurer. As a result of Mr. Kien feeding the insurer these false figures over the course of six years, his company, People’s Temp, underpaid its insurance carrier $111,856 in workers’ compensation insurance premiums otherwise due.
Mr. Kien incorporated Peoples Temp Services, Inc. in Worcester in June of 2009, as an employment agency.
Indictments for workers’ compensation fraud and grand larceny charge felonies
The statutes under which the Grand Jury charged Mr. Kien have different punishments.
The workers’ compensation statute, M.G.L. c. 152, § 14(3) makes it a felony for anyone who:
Knowingly makes any false or misleading statement, representation or submission…or engages in deceptive employee leasing practices for the purpose of avoiding full payment of insurance premiums.”
The violation of §14 carries a state prison sentence of up to five years or a jail sentence of “not less than six months nor more than two and one-half years” and a fine of up to ten thousand dollars. Additionally, the same statute provides that
A person found guilty of violating this section [§14(3)] shall, in all cases, upon conviction, in addition to any other punishment, be ordered to make restitution for any financial loss sustained to an aggrieved person as a result of the commission of the crime,”
The charge of larceny over $1,200 charges a felony that carries a possible state prison sentence for not more than five years and a fine of not more than twenty-five thousand dollars. Larceny of less than $1,200 charges a misdemeanor that carries up to one year in jail and a fine not to exceed $1,500.
Larceny in Massachusetts is a statutory crime that covers any type of theft or false pretense in obtaining property as defined by G.L. c. 266, § 30. The provision applicable to Mr. Kien under the statute would be:
Whoever…with intent to defraud obtains by a false pretence (sic)…the property of another as defined in this section, whether such property is or is not in his possession at the time of such conversion or secreting, shall be guilty of larceny.”
Attorney General Departments involved in Mr. Kien’s prosecution
Assistant Attorney General Kristy Lavigne is prosecuting Mr. Kien’s indictments with the assistance of Investigator Michael Azevedo of Attorney General Healey’s Insurance and Unemployment Fraud Unit, and investigators at the Insurance Fraud Bureau.
Attorney General Healey’s Insurance and Unemployment Fraud Unit works to protect consumers and the integrity of the insurance system by investigating and prosecuting those who commit fraud against all types of insurers, including the state’s unemployment insurance and workers’ compensation systems.