A San Mateo business owner convicted of underreporting more than $10 million in payroll to avoid hefty workers’ compensation insurance had her jail term modified yesterday to electronic home monitoring so she can care for her children.
Teresa Reif, 34, must still repay $1,651,148 to the State Compensation Insurance Fund and $451,310 to Berkshire Hathaway but will be able to remain at home rather than serve the year term in the women’s jail. Prosecutors strongly objected to the sentence modification but defense attorney Chuck Smith argued that Reif’s three children need her present.
Smith did not return a call for comment.
District Attorney Steve Wagstaffe said his office maintains that state prison would be the more appropriate sentence.
“She got a phenomenal break in being able to stay local. I don’t think any citizen in our community would say going to jail is the same as staying home. It’s a lower level of punishment,” Wagstaffe said.
The amendment comes a week before Reif was scheduled to surrender to the jail.
Reif pleaded no contest in April 2012 to eight various counts of fraud and faced up to 17 years in prison. Instead, she received the local time followed by five years supervised probation and the restitution order. At the time, Smith expressed disappointment in the sentence and said the financial penalty is a bigger hit to the Reif family than any stretch of incarceration. Both Smith and the Probation Department had recommended house arrest at the initial sentencing. Prosecutors had been satisfied with the sentence.
Reif, with her brother, owned and operated Genesis Building Services, a janitorial and pest control business located in San Mateo. Between 2004 and 2009, Reif purchased workers compensation insurance through Redwood Fire & Casualty Insurance Company and the State Compensation Insurance Fund. In 2008, the insurance company said it received conflicting data from Genesis staff about the number of employees and began suspecting it was under-reporting its payroll by approximately $544,440. Further investigation by the California Department of Insurance placed the under-reported amount at $10,657,776.69 which resulted in Reif avoiding paying $2,957,089.20 in insurance premiums.
The CDI claimed Reif misrepresented both the number of employees and its payroll when applying for insurance, while insured and during annual audits conducted by the carriers. Genesis allegedly employed more than 140 employees but Reif reported less than half the staff and gave auditors fraudulent paperwork to support the false monthly reports.
During a search of the business, investigators actually found the fraudulent books, according to prosecutors.
(650) 344-5200 ext. 102.