Los Angeles, CA, October 23, 2006--A Los Angeles Superior Court commissioner reduced bail Friday from $6.5 million to $100,000 for each of three defendants charged in a massive workers' compensation premium fraud case.
Gad "Gadi" Leshem, president of Cover-All Inc., a Chatsworth-based flooring company, his wife, Irit, and company vice president Zeev Golan were all expected to post bond before the end of the day, according to Deputy District Attorney Michael O'Gara of the Healthcare Fraud Division.
O'Gara agreed not to pursue a hearing to satisfy the prosecution that the bail money would not come from the proceeds of the trio's alleged crimes.
"There's no indication the (bail) money would have been related to the money involved in our case," he said, noting each defendant would have to post $10,000, or 10 percent of the required bail amount, to get out of custody.
Arraignment is scheduled for Nov. 13 for the three, who were arrested Wednesday at their Northridge homes for allegedly bilking the state's workers' compensation fund out of nearly $11 million in premiums.
The defendants are accused of conspiring to under-report the true amount of the company's payroll by more than $31.8 million, which resulted in workers' compensation premiums being reduced by more than $10.9 million between September 2001 and April 2006, according to the District Attorney's Office.
The three are each charged with four counts of insurance fraud and one count of conspiracy to commit insurance fraud, all felonies. The company is also charged with four counts of insurance fraud.
The case is the result of a probe conducted by the State Compensation Insurance Fund's Special Investigation Unit.
Cover-All Inc., which has corporate offices in Chatsworth, is in the business of installing carpeting and flooring as a subcontractor for businesses such as Home Depot. It has 50 offices in 17 states.
